Navigating Tax Season Without Direct File: Your Guide to Free Alternatives
Direct File Program Discontinuation
The IRS's free tax software, known as the Direct File program, which offered a streamlined filing experience for thousands of users across 25 states, has been suspended. Treasury Secretary Scott Bessent, also serving as the interim IRS commissioner, indicated that alternative, more effective solutions exist, and that private sector entities are better equipped to handle tax preparation services. This move follows a directive from the "One Big, Beautiful Bill," which prompted an IRS task force to assess the program's costs and the feasibility of its replacement. The same legislation also urged an expansion of the Free File program, which is a collaborative effort between the IRS and private companies offering free tax software to individuals earning $84,000 or less annually. Although this program serves approximately 70% of taxpayers, only about 2% utilized it during the last tax cycle.
Reasons Behind the Suspension
The decision to halt the Direct File program was met with approval from some Republican lawmakers, who labeled it as "unauthorized and wasteful." The program incurred an estimated cost of $41 million during the 2024 tax year, yet it was used to file only 0.2% of all tax returns, totaling 296,531 filings. Despite the low utilization rate, public sentiment towards Direct File was largely positive. A December 2024 survey by the Urban Institute revealed that nearly three-quarters of taxpayers were interested in using the program. Furthermore, the IRS's 2025 filing season report indicated that 94% of Direct File users rated their experience as 'Excellent' or 'Above Average'. The importance of such a program is highlighted by the fact that the average American spends about $290 on tax preparation services and advisors, according to the National Taxpayers Union Foundation, a cost that the Direct File program aimed to eliminate for many.
Alternative Free Tax Filing Resources
For the upcoming 2026 tax season, several other federal programs will continue to provide free guided tax filing options. Taxpayers always retain the choice to complete and submit their returns electronically or on paper without charge. Key alternatives include the IRS Free File program, which connects eligible taxpayers (with an adjusted gross income of $84,000 or less) to partner companies that offer guided federal tax preparation. The Volunteer Income Tax Assistance (VITA) program offers free tax counseling to individuals earning $67,000 or less, those with disabilities, and those with limited English proficiency, with certified volunteers assisting in return preparation. Similarly, Tax Counseling for the Elderly (TCE) provides specialized tax help for individuals aged 60 and above, focusing on pensions and retirement-related queries. Additionally, some private filing companies offer their own free options for taxpayers meeting specific income or occupational criteria. Lastly, Free File Fillable Forms are available directly from the IRS for electronic submission; however, these forms are not guided and may be more challenging for some taxpayers to navigate.