If you haven’t heard about this yet, it’s because it’s BRAND NEW. And as someone who thinks the way we file taxes in the US is really dumb, I’m super pumped to see the government taking a meaningful step in the right direction.

So what is this all about? Direct File is a new tax tool to file your federal taxes directly with the IRS. Instead of using some 3rd party software to fill out your taxes (and pay them), Direct File gives you a way to do it for free. It’s new and isn’t going to work for everyone this year. But I’m a big advocate because we need to support initiatives like this so the government keeps working for us, instead of leaving the system as broken as it is.

Here’s the requirements to use Direct File in this inaugural year:

• It’s currently only available for people in 12 pilot states (AZ, CA, FL, MA, NH, NV, NY, SD, TN, TX, WA, WY).
• You can only have certain kinds of income to use it (W-2, 1099-G, SSA-1099, and 1099-INT). This generally means normal employees with relatively simple situations should be fine, but self-employed or more complex cases are likely out this year.
• You can only take the standard deduction (most tax filers do this these days)
• You can’t use it if you bought health insurance directly or are withdrawing from an HSA
• Only certain tax credits are supported (Child Tax Credit, Earned Income Tax Credit, Credit for other Dependents)

The bottom line is that if you live in one of the above states and have a relatively straightforward tax situation, I’d definitely go check it out at directfile.irs.gov. It’s available in English and Spanish with chat support in both languages and an eligibility checking tool.

So it’s not the complete solution for everyone yet, but I’m a huge advocate for the government taking steps to simplify taxes along with lessening the time and cost burdens of filing.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy