After a trial run in 12 states was deemed a success, the IRS is launching direct file nationwide
in 2025, including in Wisconsin.
The free electronic filing system will allow people to complete their federal returns online,
and then taxpayers will be taken to the Wisconsin tax filing site.
The hope, the taxpayers will save time and money, because according to the U.S. Department
of Treasury, the average taxpayer spends approximately $13 and $270 to repair their
taxes each year.
Here to detail direct file is Wisconsin's Secretary of Revenue, David Casey.
And thanks very much for being here.
Thank you for having me.
We appreciate the opportunity.
So why did the government decide to go with this direct file?
Well, I think thanks to Senator Baldwin, Governor Evers here in Wisconsin.
We had the Investment, or sorry, the Inflation Reduction Act passed that funded some of
the activity at the IRS and technology advancement.
So direct file was a direct result of that.
We here at the Department of Revenue actually started a program a couple of years ago.
We had some foresight on this and created WizTax, an online filing tool.
Primary motivation for this was to provide another tool for our taxpayers to use.
Right now they can use the third party vendor for the page you file type software approach,
where they can also use our community of tax preparers, which are very helpful.
We saw that there was a niche of taxpayers who were spending too much time and too much
money and thought that direct file would be a good solution for them.
So how many Wisconsin taxpayers will be eligible to use it?
Right now we're estimating about 600,000 taxpayers will be eligible.
For the eligibility, you really just need to be a wage earner with less complicated
income, so no interest income or, for example, no real estate income.
So the majority of Wisconsinites have a particular wage income and that's it.
And then also some limited credits that you can apply for will have the earned income
tax credit and some others, but it's fairly limited at this point.
So how does it compare or compete with, say, TurboTax?
Really, you know, from a comparison or it's never the competition, it's filling a void that we've had.
You know, the pay-as-you-file tax preparers offer an excellent service and they provide a service
to what we think is just the more complicated tax returns.
If you've got more complex financial background and tax obligations, they're a great solution.
What we found, however, was that a number of taxpayers with what we call just the simplified
though the wage earner approach were paying $100, if not hundreds of dollars,
to file when we could offer that same product for free.
So we know it's free, but is it easy to use?
I mean, people won't get all balled up in the online confusion of it.
Well, we hope it's very easy to use.
We know our WISTAX solution when we piloted that over the last couple of years
grew from a few hundred users the first year to tens of thousands of users the second year.
So it was very popular.
We've also heard from those 12 states that piloted direct file last year
that it's averaging 15 to 20 minutes for a user to complete both their federal and their state return.
One of the ways that we achieve that is that once you file your federal return,
you go to the state site.
It's prepopulated with all of the tax information from your federal return,
which is the basis of the Wisconsin return.
So we get all of that demographic financial information is all prepopulated.
So it's essentially when you get to the state return, it's a review.
You review what you have, you apply for any additional credits that the state may offer,
and then you submit.
It's easy as that.
And so people have trouble for whatever reason.
Are they able to reach out to the Wisconsin Department of Revenue for help?
Absolutely.
We have an excellent customer service team that we are training up on direct file.
It will be a new application for us to administer.
They'll be ready and waiting for the calls though.
Frankly, the direct file solution is so user friendly.
We don't anticipate a lot of need from our customer service agents.
Good news.
Secretary Casey, thanks very much.
Absolutely.
My pleasure.
For more on this and other issues facing Wisconsin,
visit our website at pbswisconsin.org and then click on the news tab.
To see all of our election coverage, visit wisconsinvote.org.
That's our program for tonight.
I'm Frederica Freibert.
Have a good weekend.
Thank you.