Maryland is ready to establish an electronic filing tool that is free of charge for taxpayers. This means that numerous taxpayers can file their federal taxes without having to pay for any tax preparers or tax-filing software. The IRS’ Direct File service will be aimed at relieving the burden of taxes from taxpayers by providing them with a free avenue to fulfill their tax duties.
What is the Direct File Service?
According to the IRS, the Direct File service is an initiative that allows eligible taxpayers to to prepare and file their tax returns online for free. The service also gives taxpayers access to IRS direct file customer support representatives. The partaking states during its introductory phase included, Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota among others like Tennessee, Texas, Washington as well as Wyoming – over 140,000 Americans filed through Direct File thus saving them an estimated $5.6m on tax preparation fees.
Joining them is Maryland which is expected to provide this service for up to 700,000 taxpayers by 2024. This initiative has been intended by Maryland Comptroller Brooke Lierman to ease the strain on people who spend an average of about $270 each year on tax preparation expenses.
Who is eligible for free tax filing in maryland?
Eligibility criteria for the Direct File program is still in the process of being finalized by the Internal Revenue Service (IRS) and US Treasury. However, it is expected that this program will be available to a broader segment of taxpayers especially those with relatively simple tax circumstances. “What I can tell you is our goal is to build a system that’s going to work for working-class and middle-class Americans,” asserted Deputy Secretary Wally Adeyemo of the United States Treasury. He explained that the service will be available for people like teachers, firefighters, and other people whose main source of income is W-2 wages.
According to Comptroller Lierman, the program may serve as much as 20% individual taxpayers in Maryland, reaching hundreds of thousands of residents. “It’s unacceptable that Marylanders should have to pay any portion whatsoever of their refund or paycheck to fulfill a mandatory requirement like filing tax returns,” she said while emphasizing the effects on families falling under the category of low- and moderate-income earners.
The benefits of free filing for Maryland taxpayers
The introduction of the free Direct File service in Maryland is expected to be a “game changer,” according to Comptroller Lierman. She noted that taxes “are a part of the glue that keeps our state and our nation together,” but the process of filing taxes has traditionally been challenging and costly for many. The new program aims to simplify this process and remove the financial barriers that prevent people from fulfilling their tax obligations.
Additionally, Governor Wes Moore echoed these sentiments at a recent announcement, emphasizing the importance of making tax filing accessible and straightforward for all citizens. “To some, this announcement may seem inconsequential… but the details matter,” he stated. “They matter to the families who dread tax season because it feels complicated or expensive.”
Potential challenges to the free filing program
While the introduction of the free Direct File program is a significant step forward, it is not without its challenges. According to Sen. Chris Van Hollen, who chairs a Senate Appropriations Subcommittee, the program and other services funded under the Inflation Reduction Act could be at risk due to potential budget cuts. “There are people who don’t want us to do this, including a lot of the middlemen who currently profit from tax preparation,” Van Hollen said, noting the industry’s opposition to the initiative.
Despite these challenges, Maryland’s move to adopt the Direct File service represents a crucial step toward making tax filing more equitable and accessible for its residents.
