The tax season is officially open.
Monday, Jan. 27 is the first day you can file your returns. They may not be due until April 15, but getting a head start will get you a quicker refund. Or give you more time to save if you owe the Internal Revenue Service (IRS) some cash.
The agency said more than 140 million individual tax returns are expected to be filed for tax year 2024 before the deadline.
There are several ways to file your federal returns for free.
IRS FREE FILE
The IRS opened its Free File service earlier this month, allowing eligible taxpayers to start the process of filing federal returns for free. Returns that were completed were held until the Jan. 27 date.
To use Free File, taxpayers must have adjusted gross income (AGI) of $84,000 or less in 2024.
Those taxpayers can turn to one of eight “private-sector partners,” including one that will offer services in Spanish, to file their taxes for free.
Those companies are:
Taxpayers should note that some offer free state tax return filing while others charge to file state returns.
But, the IRS warns, you won’t get the free service if you go directly to the company’s website. Instead, use the links on IRS.gov.
IRS DIRECT FILE
This is the first tax season when New Jersey residents can use IRS Direct File, a new program that was tested in 12 states during the 2023 tax filing season.
Gov. Phil Murphy said in July that more than 1.3 million residents will be eligible for the service.
To see if you’re eligible, visit directfile.irs.gov/state and select New Jersey.
The tool then details what kinds of tax returns it will support.
It says, for example, that Direct File might be a good choice is you lived in New Jersey the entire year, if you earned all of your income in the state in 2024, and if you plan to use the same filing status, such as “Married Filing Jointly” or “Single,” for both your federal and state tax returns.
But if you don’t plan to take the standard deduction and you’ll itemize instead, you cannot use Direct File.
You also cannot use Direct File if you had unreported cash income such as tips or alimony, or other types of income that’s reported on other tax forms, such as gig work. The program supports W-2 income, unemployment and Social Security income, distributions from Health Savings Accounts and interest income.
But there are income limits. You can’t use Direct File if you have wages of more than $200,000 (or more than $168,600 if you had more than one employer), if you are married and file a joint tax return and your wages together are more than $250,000, or if you’re married but file separately with wages exceeding $125,000.
Direct File can only support tax returns that report certain kinds of retirement contributions, including 401(k)s, pensions, annuities, 403(b) plans or 457(b) plans. Most taxpayers who had distributions from those kinds of plans can also use the program.
Right now, it cannot support contributions to or distributions from an IRA, though that is expected to change in March 2025 when Direct File is supposed to be able to support distributions from most retirement plans that give a Form 1099-R.
Not all tax credits are supported by Direct File at this time, but it can be used for:
FREE FILE FILLABLE FORMS
If you earn too much to use Free File, the IRS said you can still use its Free File Fillable Forms (FFFF) starting Jan. 27, the IRS said.
“These electronic versions of IRS paper forms are ideal for individuals who are comfortable preparing their own taxes using IRS instructions and publications,” the agency said.
OTHER FREE HELP
The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer trained volunteers who give free tax help for eligible taxpayers including working families, the elderly, the disabled and people who speak limited English.
To find a location, use the agency’s Locator Tool or call (800) 906-9887.
There is also a free tax prep program offered by the Department of Defense.
“MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit,” the IRS said.
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Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com. Follow her on X at @KPMueller.
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