Recently, the Internal Revenue Service (IRS) in the United States has been offering free tax-filing options to nearly 70% of American taxpayers and has expanded another free program called “IRS Direct File” targeting high-income individuals.
The IRS’s free tax-filing program is provided through participating software companies to eligible individuals with adjusted gross incomes of $84,000 or less in 2024. The income criteria are set annually by the IRS to ensure that most federal taxpayers qualify for this program.
However, according to a statement from the California-based personal finance company NerdWallet sent to the English Epoch Times, this free service has not been fully utilized, with less than 1.9% of eligible individuals taking advantage of the program.
The statement points out, “This means that around 101 million taxpayers may have missed the opportunity to file federal income taxes for free.”
For individuals with higher incomes, they can visit the IRS website to see an updated version of the “IRS Direct File” program, which primarily targets individuals with only one employer and annual incomes of $200,000 or less, or multiple employers with incomes of $168,600 or less. The program also extends to married couples with a joint annual income below $250,000.
This year, the IRS has expanded the free tax-filing program to 25 states including Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming.
Among these states, nine do not impose state income taxes, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For states that do collect state income taxes, the IRS collaborates with state governments to send taxpayers’ federal tax returns to state-supported tax systems for filing.
Due to the “IRS Direct File” program not supporting itemized deductions, it is best suited for taxpayers with relatively simple tax returns. While the procedure does not include state tax filing, it guides users to their state’s free filing systems after federal tax returns are completed.
The IRS indicates that itemized deductions often include expenses like mortgage interest payments and property taxes for homeowners.
Chip Lupo, an analyst at WalletHub, a personal finance company based in Miami, Florida, stated in the company’s 2025 report on property taxes across US states released on February 18th, “Some states do not levy property taxes at all, while others have high property tax rates.”
The report advises that Americans considering moving and aiming to maximize their savings should take into account property tax rates in addition to overall living costs and other financial factors when deciding on a relocation destination.
The report released on February 18, 2025, reveals surprising property tax rates in Hawaii, with a tax rate of only 0.27% of property value, the lowest property tax rate in the US.
The median home value in Hawaii is $808,200 (data from 2023). Based on this criterion, the property tax in Hawaii amounts to $2,183. Among the top five states with the lowest tax rates, Alabama stands at 0.38%, while Nevada and Colorado are at 0.49%, and South Carolina at 0.51%.
On the other hand, the top five states with the highest property tax rates are New Jersey (2.23%), Illinois (2.07%), Connecticut (1.92%), New Hampshire (1.77%), and Vermont (1.71%). New Jersey holds the highest property tax rate in the US, with a median property tax of $9,541 on a $427,600 home.
New York and California are typically the two states with the highest housing costs in the US, with property tax rates of 1.6% and 0.71%, respectively. In New York, property tax for a home with a median value of $403,000 amounts to $6,450, while Californians with a $695,400 median-valued home pay $4,926 in property tax.
“Property taxes can be a minor inconvenience or a significant burden depending on the location,” Lupo remarked.
According to data from the US Census Bureau, American households pay an average of $2,969 annually in property taxes for their homes. Considering these figures and the substantial debt burden Americans carry, it is not surprising that over $14 billion in property taxes goes unpaid each year, according to the National Tax Lien Association.
Additionally, the IRS cautions taxpayers to be wary of any hidden fees in other “free” tax-filing options. For those who may need assistance with filing and have incomes of $67,000 or less, the IRS offers the Volunteer Income Tax Assistance (VITA) program and Tax Counseling for the Elderly (TCE) program.
These programs, both operated by traditional individual retirement account (IRA) providers, are staffed by IRS-certified volunteers typically affiliated with non-profit organizations funded by the IRS.
IRS Expands Free Tax-Filing Options to 70 Percent of US Taxpayers, as seen in the English Epoch Times.