A major update to the IRS Direct File program can now automatically import return verification information, preventing one of the most common filing errors. Direct File is now available in 12 states and accepts simple tax returns with limited income and deductions. By using Direct File, taxpayers can access their IRS account information to validate their returns before filing, making the process more efficient.
The federal income tax deadline is April 15th, but some taxpayers in disaster-hit areas have until June 17th. Several free tax-filing options are available, including the IRS Direct File and Free File programs. Consider claiming tax credits and deductions to reduce your tax bill. Remember, if you contributed to a retirement account or an HSA in 2023, you can still make contributions until the tax deadline to potentially lower your tax liability.
Two tax plans are emerging for the upcoming U.S. presidential election. Trump proposes extending the Tax Cuts and Jobs Act, including permanent cuts for individuals. Biden plans to extend these cuts for those earning less than $400,000, while increasing taxes for the wealthy and corporations. Both plans rely on the expiration of the Tax Cuts and Jobs Act provisions in 2025, which could result in higher taxes for most Americans if Congress does not act.
President Biden's proposal includes tax credits to enhance homeownership affordability for middle-class families. First-time buyers would receive $5,000 annually for two years, while families upgrading would be eligible for up to $10,000. However, experts express skepticism that these credits alone can address the underlying issues of high mortgage interest rates and insufficient affordable housing supply.
