Direct File, an IRS competitor to business tax software, works much like TurboTax or other software by asking yes or no questions and asking you to fill out information from your tax documents. The IRS will begin inviting first users to try the program in mid-February, and by the end of this year’s tax season, it will be open to everyone in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in those states, you can file your state taxes for free as well (if your state has an income tax).
However, Direct File can only handle certain tax situations. If you have income from self-employment, or if you want to claim a tax break for child care expenses, for example, you can’t use the new program.