IRS Direct File is a new, free online tax filing option built and supported by the Internal Revenue Service. It’s available to qualified U.S. tax filers with the simplest tax situations and only available in certain states at this time. In this article, we explore the differences between Direct File and TaxSlayer, and key things you should keep in mind when deciding how you’ll file your taxes this year.
IRS Direct File vs. TaxSlayer
Both Direct File and TaxSlayer allow you to enter the information from your tax forms into an online software that uses your entries to complete an electronic tax return. Once you’ve finished, both TaxSlayer and Direct File ensure your return is delivered directly to the IRS.
Support options
Both programs offer support in case you have questions, but the type of support may be different, depending on how you choose to file. Direct File has live chat, but you may not be able to speak to a real person on the phone or by email. TaxSlayer offers unlimited phone and email support no matter which product you’re using. Live chat assistance is available with TaxSlayer Premium and Self-Employed.
Product choices
With Direct File, there’s only one way to file your return. But when you file with TaxSlayer, you can choose the option that meets your needs.
TaxSlayer Simply Free allows qualified individuals to file a simple tax return for free.
TaxSlayer Classic handles all tax situations with no restrictions. It includes all IRS forms, credits, deductions, and income types, as well as unlimited phone and email support.
TaxSlayer Premium is ideal for people who want top of the line tax help. It includes everything offered with Classic, plus Audit Assistance, a support option called Ask a Tax Pro, and live chat assistance.
TaxSlayer Self-Employed is designed to for people who need to report income and expenses from self-employment. When you file with Self-Employed, you have access to a tax pro with self-employed tax filing expertise, year-round tax tips, quarterly estimated payment reminders, specialized guidance for entering 1099 income, and more.
Tax credits and deductions
TaxSlayer Classic includes all tax credits and deductions with no restrictions. In fact, TaxSlayer ensures you’ll get every tax break you deserve. It’s part of the maximum refund guarantee.
IRS Direct File does not include every credit or deduction. In fact, you can’t use Direct File at all if you plan to itemize your deductions.
Here are some pretty important tax breaks that are not supported by Direct File:
- Lifetime Learning Credit
- American Opportunity Credit
- Low-Income Housing Credit
- Clean vehicle tax credits
- Residential Clean Energy Credit
- Energy Efficient Home Improvement Credit
- Adoption Credit: Qualified Adoption Expenses (Form 8839)
IRS Direct File eligibility requirements
At the time that this article is published, IRS Direct File has several limitations including certain credits, deductions, income types, and states that are supported.
It’s currently available in just 12 participating states to people who are filing simple tax returns and who have income from a W-2 job, Social Security, or unemployment. IRS Direct File is not able to handle itemized deductions, not to mention some very important tax credits – like the Lifetime Learning Credit and the Low-Income Housing Credit.
If your tax situation is just slightly complex, chances are you won’t qualify for this program. Here are some important things that could disqualify you from using IRS Direct File:
- You have any income from a side gig or self-employment
- You purchased insurance directly through the Health Insurance Marketplace
- You file jointly and your total wages are more than $250,000 or your spouse’s wages are more than $200,000 ($160,200 if your spouse had more than one employer)
- You file as single, and you earn more than $200,000 ($160,200 if you had more than one employer)
Advantages of filing online with TaxSlayer
If you manage to meet the very strict qualifications to file with IRS Direct File but you’re still wondering if it’s the right one for you, your decision may come down to some very simple factors.
TaxSlayer lets you file early
TaxSlayer opens in early January – even before the IRS does – so you can start entering your information as soon as you have your forms. With Direct File, you have to wait until the IRS is open to even get started, typically in late January.
TaxSlayer guarantees accuracy and your max refund
It’s important that you can trust the service you use to file your taxes. TaxSlayer has been in the business of helping people file their taxes for more than 60 years. Our DIY software is reliable and easy to use, and we guarantee your biggest refund, as well as 100% accuracy. IRS Direct File doesn’t guarantee either of those.
TaxSlayer offers audit help
If you’re ever audited by the IRS, you might want to have some backup. When you file with TaxSlayer, you can opt in to extra services like audit assistance and protection. IRS Direct File doesn’t include audit help.
Free tax filing options from TaxSlayer
TaxSlayer Simply Free is a free tax filing option for people who need to file a simple return, and who don’t claim dependents or itemize their deductions. Simply Free includes the student loan interest deduction and education credits, and it comes with unlimited phone and email support.
Filing with Simply Free is easy to do:
- Check out the requirements for Simply Free
- Create a new account or log in to your existing TaxSlayer account
- Let TaxSlayer guide you through entering your personal and income information
- Submit your return
If it turns out your tax situation doesn’t meet the requirements for Simply Free, then you’ll be switched to TaxSlayer Classic. But, you won’t be charged any fees until you check out.
