US Direct File won't happen in 2026, IRS tells states

PalawOne posted . . . . The free service that allowed taxpayers to file online directly with the IRS was used by hundreds of thousands of taxpayers in 2024 and 2025, who gave it high marks — although tax prep companies and Republicans have sought its end.

The IRS has notified states that offered the free, government tax filing service known as Direct File in 2025 that the program won’t be available next filing season.

But hidden in this article is:

The IRS has relied on a public-private partnership called Free File for decades to give most Americans a free way to file their taxes, although it's been extremely underutilized.

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This will not affect me as an American Expat I'm not required to file.

In 2024 . . . . . 161 million individuals filed taxes, yet only 296 thousand used that discontinued program and it was only available in 25  states.

PalawOne posted . . . . The free service that allowed taxpayers to file online directly with the IRS was used by hundreds of thousands of taxpayers in 2024 and 2025, who gave it high marks — although tax prep companies and Republicans have sought its end.

The IRS has notified states that offered the free, government tax filing service known as Direct File in 2025 that the program won’t be available next filing season.

But hidden in this article is:

The IRS has relied on a public-private partnership called Free File for decades to give most Americans a free way to file their taxes, although it's been extremely underutilized.
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This will not affect me as an American Expat I'm not required to file.

In 2024 . . . . . 161 million individuals filed taxes, yet only 296 thousand used that discontinued program and it was only available in 25 states.

- @Enzyte Bob

This will not affect me as an American Expat I'm not required to file.

Even if it did Bob most US tax payers find navigating the IRS tax return a challenge to put it lightly which is why the so called 'Tax Prep' companies exist. A whole new cottage industry has grown up as a result. Effectively the direct file is anathema given the complexities involved which is why its not used.

This will not affect me as an American Expat I'm not required to file.

Can you elaborate on this?

I have worked internationally since 1977.  Always filed, but occasionally I have not been required to pay anything.

I actually used the free-file service in 2024 but this year I used freefile with TaxAct, a private firm which offers free filing of federal, but not State taxes. Then, if your state requires taxes they will charge for it. Also, I suspect the IRS was free to all States but 25 or so States had additional tax requirements and the article mixed that up. The IRS is nationwide and would likely never restrict its service to only 25 States. I think the reporter confused that. Anyway, the IRS free-file was OK, a bit clumsy, but did not save information that I could carry over to the next years so, IMO, the free private service is better because it saves information that carrirs over to the following years. USA expats, who make taxable income above whatever the standard deduction is at the time, must file a tax return no matter where they live. The Trump admin did cave to corporations by eliminating it in "the big beautiful bill" but the private free-file program, voluntary for the private firms who participate, have done ok. They make their money from packaging a state tax form to customers who need one but federal filing is free for everyone IF the return is not too complicated. If you are not a resident of any State, like many of us are not when living here, the federal tax filing from the private firms is efficient and 100% free. However, they initially emphasize your doing a paid return in hopes you buy a more deluxe package and it is a little tricky for some elderly, I suppose, because it does take a bit of investigation to get to the bare bones free service. But Trump, a conservative who ran on middle-class populism, should have left the government IRS  free-file in place in my opinion.

Lotus Eater said . . . . Even if it did Bob most US tax payers find navigating the IRS tax return a challenge to put it lightly which is why the so called 'Tax Prep' companies exist. A whole new cottage industry has grown up as a result. Effectively the direct file is anathema given the complexities involved which is why its not used.

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For years I used an enrolled agent to prepare my taxes, with my ss, also me working and my wife working, I thought best to use a professional. After years actually going over the returns it comes to pass he was using the standard deduction.

I realizes after saving hundreds of receipts the they were not enough to file a long form.

So with the tax pamphlet and forms available at the post office, I decided to do it myself. I just mimicked previous returns from past years.

Unrelated: The IRS will only issue refunds for the last three years if you are a procrastinator.

@Lotus Eater

Effectively the direct file is anathema given the complexities involved which is why its not used.

I used it in 2024 an I liked the idea of working directly on the form 1040 rather than answering a QA. In the past I used to fill out the forms myself. So with direct file, you basically had like an editable 1040 pdf form where it made minor calculations for you but did not complete worksheets such as calculating taxable income when including social security and capital gains income..with direct file you read the instructions and did it your self. The problem is that your work and form disappears after a few months although you can always order an abbreviated transcript from your secure online IRS account. So, it is the same complexity as filling out a paper form and mailing it except you do not need to spend $45 to DHL it to the IRS in Austin.

I used to have complicated taxes (multiple properties, a 1031 Exchg, etc) so had a CPA to sort it all out. Cost me a grand a year and hours just to gather up all my receipts and records. Now life is much simpler so a few hours with Turbo Tax and it's done. Cost about $75.

I thought that the IRS was going to be abolished?

@Enzyte Bob

If you have no income you're not required to file. Being an expat has ZERO, ZIP, NADA, NOTHING to do with it.

Social Security retirement benefits is INCOME.

Military retirement is INCOME

Disability is INCOME

You may not be required to PAY TAXES on said income. But the law is you're supposed to file.

I've used the free filing online via IRS since I retired. I've also not had a high enough income in retirement to be required to pay any taxes on said income.