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Newsweek
17-06-2025
- Business
- Newsweek
IRS Change Proposed In Senate Finance Bill
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Republican Senators have proposed getting rid of two of the Internal Revenue Service's free tax filing programs, which allow millions of Americans to file their taxes free of charge. The Senate Committee on Finance has unveiled its amendments to the One Big Beautiful Bill Act, which was approved by the House of Representatives in May. It includes a proposal to "terminate" the IRS Direct File, as well as investigating whether that and the Free File program could be replaced. Why It Matters The Associated Press reported earlier this year that the Trump administration plans to end the Direct File program, which is only in its second year. In February, former Department of Government Efficiency head Elon Musk said he had "deleted" an arm of the General Services Administration, known as 18F, which helped build and run the program, as part of his sweeping cutbacks across federal agencies. What To Know IRS Direct File is available in 25 states and allows taxpayers with relatively simple tax returns to file without the need for a third party. According to the IRS, some 30 million taxpayers were eligible to use Direct File to file 2024 federal tax returns during the 2025 tax filing season. Stock image/file photo: Internal Revenue Service sign at the IRS Building in Washington, DC in March 2018. Stock image/file photo: Internal Revenue Service sign at the IRS Building in Washington, DC in March 2018. GETTY Free File helps taxpayers with adjusted gross income under $84,000 per year file federal income tax returns online using guided tax preparation software. The proposals include a provision that would direct the Treasury Department to "terminate the current Direct File program at the IRS," as well as "author a report evaluating the establishment of a public-private partnership between the IRS and private sector tax preparation services to offer free tax filing, potentially replacing both the existing Direct File and Free File programs." Direct File has only been running for two years and was piloted in 12 states in 2024 for the 2023 tax season. The IRS described the initial launch as a success, with 140,803 taxpayers using it in its inaugural year and more than 3.3 million taxpayers across all states using the eligibility checker. It was later expanded to 25 states for the 2024 season. No information is publicly available for how many used the service this year. Newsweek has contacted the IRS via email for the figures. Democrats have previously expressed concerns over ending the program. A letter signed by approximately 200 lawmakers was sent to Treasury Secretary Scott Bessent in April of this year, requesting that the program be extended for the 2025 tax year. While the program is designed to help lower tax preparation costs for Americans, it has attracted some criticism. In May 2024, Tania Mercado, spokesperson for TurboTax's parent company Intuit, told Newsweek that the program is "a solution in search of a problem and every American can already file their taxes for free, without any cost to the government or taxpayers." What People Are Saying Democratic lawmakers in their letter to Bessent: "Ending this free, easy-to-use, and popular program would be an insult to American taxpayers, eliminating an important alternative to commercial options provided by the tax prep industry." Mercado, speaking to Newsweek in February 2024: "Direct File is not free tax preparation, but rather a thinly veiled scheme where billions of taxpayer dollars will be unnecessarily used to pay for something already completely free of charge today." What Happens Next No date has been given for when the termination of Direct File could begin. The Senate is looking to pass its amendments on the bill by Independence Day—July 4—at which point it would return to the House for a final vote before being signed by the president.
Newsweek
10-06-2025
- Business
- Newsweek
IRS Issues Reminder of June Tax Deadline for Millions: What To Know
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Internal Revenue Service has reminded quarterly taxpayers that their second deadline of the year is approaching on Monday, June 16. Why It Matters Most employees pay their taxes on the annual deadline every April, but freelancers, small business owners and anyone else earning money that hasn't been subject to federal withholdings may have to submit quarterly payments four times a year. Filing and paying your taxes on time means you can avoid penalties. What To Know Federal taxpayers who earn income not subject to withholding—such as self-employment earnings, gig work, interest, dividends, capital gains, rental income, or 1099 payments—may need to make estimated tax payments during the year, the IRS says. Taxpayers—including sole proprietors, partners, and S corporation shareholders—who expect to owe at least $1,000 in taxes for the year are generally required to make estimated tax payments. Corporations must do the same if they anticipate a tax liability of $500 or more. Individual taxpayers earning money through gig work, freelance services, or the sale of goods may also need to pay estimated taxes, even if they receive a Form 1099-K. This includes those who also work regular jobs and have their income taxes removed via W-2 throughout the year by their employer. Internal Revenue Service sign at the IRS Building in Washington, DC, on March 14, 2018. Internal Revenue Service sign at the IRS Building in Washington, DC, on March 14, 2018. GETTY Form 1099-K reports of payments received for goods or services through payment cards (like credit, debit, or gift cards) and third-party platforms, such as payment apps or online marketplaces. To figure out your federal quarterly estimated tax payments, you'll need to estimate your adjusted gross income, taxable income, deductions, credits, and total taxes for the 2025 calendar year. If your income drops or increases throughout the year, you can adjust your quarterly payments as you go. Form 1040-ES includes an Estimated Tax Worksheet to guide you through the calculation. The June 16 deadline applies for income earned between April 1 and May 31st. How To Pay Quarterly Taxes Electronic payment is the fastest, safest, and most convenient way to pay, the IRS says. Taxpayers have several options, including: IRS Online Account or Direct Pay – Pay directly from a checking or savings account, or use a credit/debit card or digital wallet. Payment processors may charge a fee for card payments. – Pay directly from a checking or savings account, or use a credit/debit card or digital wallet. Payment processors may charge a fee for card payments. Electronic Federal Tax Payment System (EFTPS) – A secure federal payment system for individuals and businesses. – A secure federal payment system for individuals and businesses. Check or Money Order – Made payable to "United States Treasury" and submitted with Form 1040-ES. – Made payable to "United States Treasury" and submitted with Form 1040-ES. IRS2Go App – The official mobile app of the IRS for secure payments and resources. Further Payment Deadlines There are two further payment dates for 2025 taxes this year. The next is on September 15, 2025, for taxes payable for June 1 to August 31,and the final is on January 15, 2026 for income earned between September 1 to December 31.
