IRS Free File is now available for the 2024 filing season

Original Article ↗ Hacker News Discussion ↗

IRS Free File for the 2024 tax season is prompting debate over income limits, usability, and the role of private tax-prep companies. Commenters contrast the IRS’s free options—partner-based Free File, no-limit Free File Fillable Forms, and the new Direct File pilot—with commercial tools like FreeTaxUSA and TurboTax, arguing over data privacy, feature gaps, and how effectively they undercut the paid tax-prep industry. Many see deeper problems in the complexity of the U.S. tax code and decades of lobbying that have hindered simpler, government-run filing systems common in other countries.

Income limits & AGI-based eligibility

  • Many question why Free File is capped at $79k AGI when many high earners have simple W‑2/standard deduction returns.
  • Using AGI as the gate is seen as a usability problem, since AGI is only known after doing the return.
  • One explanation from the thread: the IRS–industry agreement aimed to give free prep to ~70% of taxpayers, so the income cap is tuned to exclude the top ~30%.

Government vs private filing options

  • Several users endorse FreeTaxUSA, Cash App Taxes, and similar tools: free federal, cheap or free state, and no income limits.
  • Some prefer using a .gov service on principle; others assume private software will remain more usable.
  • Debate over whether using private free tools preserves the status quo or helps undercut expensive tax software.
  • IRS Direct File pilot is discussed as the true government option, but criticized as limited: only 12 states, no state returns, and excludes business/gig income, itemization, several credits. Defenders say it’s a reasonable first-step pilot.

Free Fillable Forms & DIY filing

  • Multiple comments recommend IRS Free File Fillable Forms (no income limit) or even hand-filling the 1040/PDFs and mailing.
  • E‑filed fillable forms are preferred to paper due to large processing delays for paper, especially during the pandemic.

Tax complexity, fear, and international comparisons

  • Non‑US commenters note that in some countries you just confirm a prefilled return; they view paying to file as uniquely “American.”
  • Others counter that filing in the US is technically free if you do it yourself; the issue is complexity and poor government tooling, partly blamed on lobbying by tax-prep firms.
  • The widespread belief that honest mistakes are a felony is challenged; several report the IRS simply recalculating, billing extra tax plus modest penalties.

Deductions, AGI reduction, and inequality

  • Long subthread on lowering AGI: business structures, 1099 vs W‑2, large retirement contributions, donor-advised funds, and real-estate deductions.
  • Consensus that typical W‑2 employees (e.g., many engineers) have relatively few meaningful deductions and high effective rates, while landlords, business owners, and sophisticated filers can do much more.

Politics, lobbying, and incentives

  • Strong sentiment that Intuit/H&R Block lobbying has kept IRS systems bad and blocked simpler, prefilled returns.
  • Some argue parts of the political class want taxes to remain painful and manual to stoke anti-tax sentiment.

Privacy & data use

  • Skepticism that “trusted partners” are free out of goodwill; concern they monetize data unless users carefully opt out.