Paying taxes will be less complicated for some people this year in New Hampshire, one of 12 states where a new, free government tax-filing system will soon be available.
The system, called DirectFile, is being beta-tested by the IRS and should be rolled out to the public in March. It is designed to be used by people who have simple, straightforward taxes, letting them file without having to pay for assistance.
“You don’t have to speak tax language. You answer questions about your life and it gives you answers,” said Cary Gladstone, area director of the Merrimack County region for the United Way, who participated in a webinar about DirectFile. “I would say it’s user-friendly, really designed for younger folks who do not have a very complicated tax return and who use their phones – it’s designed to be mobile-friendly, too.”
Gladstone described it as an “interview-based system.” For example, he said, “It will not have a page where you list your dependents. It will say, tell us how many people live with you this year? If grandma lived with you and you’re providing her support, you may qualify for a tax benefit.”
More information is available at directfile.irs.gov.
The system, available in Spanish or English, has limits. For example, it only supports standard deductions rather than itemized deductions, and doesn’t take all types of income, most notably not accepting income from dividends or income from the tax form known as a 1099. Also, not all tax credits can be claimed in Direct File.
“They are very clear about saying, we don’t want to over-promise. It’s not for everybody,” said Gladstone
United Way has long offered free tax-preparation help at operating Volunteer Income Tax Assistance centers. Gladstone noted that the need is great, pointing to the 211 hotline for non-profit services: “The No. 1 reason people call 211 in New Hampshire is for tax questions,” he said. “Last year it had almost 11,000 calls about taxes.”
A site called nhtaxhelp.org lists scores of sites around the state where people can schedule free sessions to help with their taxes.
Gladstone added that despite being a sort of competitor, United Way is a fan of DirectFile. “We welcome opportunities for people to get their taxes done for free.”
DirectFile differs from the IRS Free File program, which offers commercial software for free to low- and middle-income earners but doesn’t provide help in calculating tax liability.
DirectFile was authorized as part of the Inflation Reduction Act from the Biden administration, which was passed by Congress in 2022.
