The holidays are over, a new year is here, and along with all the various upheavals that we are facing (including some possible changes in tax law), most of us have to deal with our annual income taxes. Sorry about that.
Tax day this year falls, for most of us, on the traditional April 15th. There are exceptions: for example, if you live in California and in an area that’s been affected by wildfires, you are eligible for tax relief and an extended deadline of October 15th.
Despite the stress that many of us feel at the thought of tackling our yearly taxes, try not to worry — we’re going to list some resources that are available so that you can prepare your taxes. As always, it might not be a bad idea to start working on those taxes as soon as possible to avoid any last-minute panic. And whether you’re a full-time worker dealing with a single W-2 or a freelancer / gig worker getting a series of 1099s, the fastest way to pay the piper these days is to do it online.
On the positive side of the ledger, if you live and work in one of 25 states, there’s now a new way to figure out your taxes: via the IRS’s own Direct File program. We’ll get to that in a moment.
To begin with, the IRS offers a series of directions on its website to help US citizens determine what their taxes are, report those taxes, and send in payments (or ask for refunds) using its e-file online method. Here’s a rundown of what’s available and where you can find it, starting with how to fill out your tax forms.
As mentioned above, the IRS has developed Direct File, its own free filing software. To use it, you need to have lived and worked in one of 25 states for all of 2024:
- Alaska
- Arizona
- California
- Connecticut
- Florida
- Idaho
- Illinois
- Kansas
- Maine
- Maryland
- Massachusetts
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Washington state
- Wisconsin
- Wyoming
For now, the Direct File pilot program is limited to fairly simple tax scenarios, although it allows for more than it did last year. For example, you can’t use it if you’re self-employed, have any gig economy income, or itemize your deductions. There are other limitations as well, depending on what state you live in. If you click on “Check eligibility now” on the Direct File page, you’ll be directed to a several-page questionnaire that will help you determine whether you can file using this program.
Try the Free File program
If Direct File doesn’t work for you but your adjusted gross income for 2024 was $84,000 or under, you can use the IRS Free File option. There are several of what the IRS calls “trusted partners” to choose from. When you go to IRS Free File, you are given a series of questions to see if you qualify; if you do, you are then referred to an appropriate partner.
You may notice the absence of two prominent tax software companies: Intuit, the maker of TurboTax, and H&R Block. When the IRS announced its intention to develop Direct File, Intuit and H&R Block pulled out of the Free File program in protest (although H&R Block offers its own limited free tax filing).
If your income is above $84,000, you can still use fillable forms provided by IRS Free File, but you don’t get the support of the free software, and you can’t do your state taxes through this method. (If you’re really into doing your own taxes, you may want to check out the IRS page on tax tips.)
If you’re not a pro at filling out taxes, you’re going to either have to use e-file with one of the available software solutions or find a tax preparer who can do it for you. For those whose income is $67,000 or less, who have disabilities, or whose English is limited, the IRS has a program called Volunteer Income Tax Assistance (VITA) to help with tax preparation. There is also Tax Counseling for the Elderly (TCE) for people who are 60 years of age or older. Go to the page describing these programs for more information. You can also use a locator tool to find providers of these programs near you. There’s also the AARP Foundation Tax-Aide program, which is available up to April 15th and provides a variety of services, including coaching from a tax counselor.
If you use a tax preparer, the person or company that does your taxes needs to be authorized to use e-file; if you don’t already have a tax professional, you can find one at the IRS website.
If you’ve got to actually pay taxes, it’s a lot easier to do it online. The IRS lists a variety of payment methods.
First, you can use Direct Pay to pay your annual taxes (using 1040 forms), quarterly estimated taxes, or a number of other types of taxes; they are listed here. Direct Pay is for paying personal taxes. If you are paying business taxes, you can do that through the Electronic Federal Tax Payment System (EFTPS). Be aware that, according to the IRS, it can take up to five business days to process a new EFTPS enrollment.
Direct Pay accepts payments from your bank account without any additional fees. You can also pay via a credit or debit card or a digital wallet such as PayPal or Click to Pay; however, there is a fee involved (since the IRS isn’t going to absorb what your credit card company is charging for the service). At the time this was written, the IRS was offering two services to choose from that can process these payments. If you’re paying by debit card, it will cost $2.10 or $2.15. If you use a credit card, it will cost you 2.89 or 2.95 percent of your payment amount.
If you owe taxes but simply don’t have the available funds to pay them, you can arrange for a payment plan. You can even do it online — if you qualify.
- If you owe less than $100,000 and can manage to pay the full amount within 180 days, you can establish a short-term payment plan in which there is no setup fee (although you will have to pay penalties and interest on the owed amount).
- If you owe $50,000 or less, you can go for a long-term payment plan. If you arrange for automatic monthly payments, there is a $22 setup fee; otherwise, there is a $69 setup fee. (These vary if you qualify as low income.)
Otherwise, you can apply for a monthly payment plan for which you apply by phone, mail, or in person. This plan costs $107 if you agree to an automatic monthly debit from a checking account, or $178 otherwise.
One of the ways the IRS tries to convince you to file online is to assure you that you will get your refund faster — in less than 21 days in most cases, although there are exceptions. (If you file via paper, it could take four weeks or more to process.) Once you’ve filed, you can check the status of your refund online 24 hours after you’ve filed. You can also download the official IRS2Go mobile app, which allows you to check on the status of your refund, pay your taxes, and get other information.
What if I’m going to be late?
If you can’t do your taxes by the due date because of a family emergency, job pressures, or because you simply put it off for too long, you can file for an extension. We’ve got a separate article telling you how to do that right here.
