Leading the Department of Government Efficiency (DOGE), now officially under the United States Digital Services, Elon Musk has promoted the creation of a mobile app for Americans to file their taxes for free. This would add to the options the Internal Revenue Service (IRS) already offers for free tax filing.
Key Takeaways
- The DOGE is considering creating a new mobile app for Americans to file their federal taxes for free.
- The IRS already offers three free filing methods for taxes: paper forms, IRS Direct File, and IRS Free File.
- The DOGE discussions have negatively impacted the stocks of popular tax software companies H&R Block and Intuit, the parent company of TurboTax.
What Musk’s DOGE Commission Is Considering
During a November DOGE meeting, The Washington Post reported that Elon Musk and Vivek Ramaswamy, who has since parted ways with the DOGE efforts, discussed the possibility of creating a mobile app so Americans could file their federal taxes for free. Musk posted on X in November about his desire to simplify the tax code, so this would be a step in that direction.
However, that’s easier said than done. The Internal Revenue Code (IRC) consists of more than 4 million words, so creating an app that not only encompasses the entire code but also calculates taxes based on the code is quite an undertaking.
What Are Taxpayers’ Options for Tax Preparation?
Currently, taxpayers have three primary ways of filing taxes: do-it-yourself (DIY), using tax software or hiring a CPA.
IRS DIY
Taxpayers can choose from three IRS options when doing their own taxes, all of which are free to use:
- Print, fill out and mail in the tax forms
- Use IRS Direct File to file online
- Use IRS Free File to file online
While all of these methods are free to use, the Direct File and Free File programs have requirements, so not all taxpayers are eligible to use electronic filing. Also, they can be time-consuming, especially if you have many itemized deductions, complicated investment income, or own a business. When filing yourself, it’s possible you could miss deductions that could save you money, or you may make filing errors that could cost you later.
Use Tax Software
Taxpayers can use a variety of tax software programs to make tax preparation easier. These include TurboTax, TaxSlayer, H&R Block, and others. Some are free to use but have limitations, while others have paid tiers that offer additional features like live support. These can be pricey, depending on the amount of assistance you need.
Hire a CPA
Hiring a CPA to prepare and file taxes is easily the most expensive option. However, if you have many itemized deductions, have complicated investment income or losses, are self-employed, or have additional forms such as schedules for student loan interest, hiring a CPA could save you money in the long run–and land you a bigger refund.
How Are The Major Tax Preparation Services Reacting?
Following the report of the DOGE’s interest in a mobile app for free tax filing, Intuit and H&R Block suffered sharp drops in their stocks. Intuit stock dropped 5.1%, while H&R Block stock dropped 8.2%.
At H&R Block, George Agurkis, director of government relations, issued a statement saying the company looks forward to engaging with the incoming administration and DOGE regarding tax administration, according to Yahoo Tech. Intuit CEO Susan Goodarzi told The Verge the company doesn’t “lobby against free” and free tax filing is “not relevant to our business.”
The Bottom Line
DOGE leadership has discussed creating a new mobile app so Americans can file their taxes for free. However, there already are free tax filing options, both through the IRS and by using certain tax preparation software. You should review these options along with available paid options to see which filing method best suits their individual tax needs. Doing so could save money upfront or in the form of a larger refund–or both.