IRS releases updated tax numbers for 2026
The IRS releases updated federal income tax brackets and standard deductions for tax year 2026, which apply to returns filed in 2027.
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- Free File is not Direct File, which the IRS is eliminating for the 2026 tax season.
- This tax season, eight private partners are offering guided tax software products through IRS Free File, according to the IRS.
The IRS Free File program is up and running for the 2026 tax season. Taxpayers can use the system even before the Internal Revenue Service officially accepts tax returns starting January 26th.
Eligible individuals won’t have to pay a penny for tax software offered through this program by choosing one of eight tax software companies that have agreed to provide free software to people in their situation through IRS.gov/freefile.
Free File is not Direct File, which the IRS is eliminating for the 2026 tax season. Direct File was a pilot program and was not available nationally. It will begin offering in 12 states in 2024, and expanded to 25 states last year. The U.S. Treasury has announced that Direct File will end in November 2025.
The Direct File program had a special feature that made filing your taxes easier because it allowed you to pre-populate your return with tax information that the IRS already had on file, such as information from your W-2 form. You can’t do that with free files.
Direct File now allows eligible taxpayers to file relatively simple returns directly to the IRS online, including salary income from work reported on a W-2, Social Security income, pension and annuity income, and more. The system guided taxpayers through a step-by-step process of preparing their federal tax return by answering a series of questions.
Given that the end of Direct File made headlines, some taxpayers may mistakenly believe that there is no way to prepare a 2025 federal income tax return online for free on IRS.gov.
But do-it-yourself taxpayers looking to save money shouldn’t miss the Free File program, which began in 2003 and continues in 2025 for taxpayers with adjusted gross income of $89,000 or less.
Filing season begins on Monday, January 26, but with IRS Free File software, taxpayers can prepare and file their returns now and have them on file for e-filing once the season officially begins.
The IRS Free File program began accepting individual tax returns on January 9th for eligible taxpayers. Taxpayers who prepare their own taxes, regardless of income, will be able to use the IRS’s free file entry form starting January 26.
Not everyone can use Free File, but far more people are eligible for the program than are actually using Free File. The service is touted as a way to help 70% of U.S. taxpayers prepare and e-file their federal tax returns.
But of the 161 million individual income tax returns filed in fiscal year 2024, only 3.1 million, or about 1.93%, were filed using FreeFile, according to IRS data.
As an interesting comparison, according to IRS data, approximately 10.8 million personal returns were filed on paper in fiscal year 2024, and 141,000 returns were filed using Direct File, which was available in 12 states at the time.
Free File is one of the underutilized freebies that benefits do-it-yourself tax preparers.
This tax season, eight private partners are offering guided tax software products through IRS Free File, according to the IRS. A long list of details is available at IRS.gov/freefile.
To access the Free File site, you must go directly from the IRS website.
The IRS notes that the term “free” means eligible taxpayers can prepare and electronically file their federal tax returns for free using tax preparation software provided by members of an organization called the Free File Alliance.
If you’re looking for free software here, you need to understand that many people won’t be able to use any of the eight programs currently offered. In some cases, you may be able to work with as many as three providers.
Each tax software partner sets its own requirements for who can use the free software on its platform. Your provider may have age or income restrictions.
The IRS site has some very simple questions that guide you to software companies that offer free services based on your income, age, state of residence, and other factors.
Alternatively, you can refer to the list of requirements listed by each provider on the IRS site.
For example, OLT.com’s Online Taxes serves people with an AGI cap of $51,000, unless they are active duty military and have an AGI of $89,000 or less.
TaxSlayer has an age limit of 67 years or younger and an AGI of $19,000 to $89,000. If you are an active military member with an AGI of $89,000 or less, the age requirement does not apply. TaxSlayer processes returns for those eligible for the Earned Income Tax Credit, and there are no age restrictions for tax preparers using the Free File system.
Again, you want to see the offers directly on IRS.gov to avoid being directed to programs that appear to be free online but aren’t.
Certainly, the Free File program has its limits when you look at the limits imposed by individual partners. TaxAct has an age limit of 20 to 60 to use the Free File program unless you are an active military member.
Some partners offer free state tax return preparation and filing. Some, like ezTaxReturn, don’t.
The list of participants is getting smaller every year. For example, in 2014, the IRS listed 14 tax software companies participating in Free File. H&R Block and Intuit left the Free File Alliance several years ago.
Part of this impact comes after a number of controversies and criticisms, including allegations of deceptive practices by some participants in steering consumers to other programs that are paid instead of free.
For the 2026 tax season, the IRS is listing the following partners on Free File. Drake (1040.com); ezTaxReturn.com (offers English and Spanish); FileYourTaxes.com; Online Taxes; Tax Law; TaxHawk (FreeTaxUSA); and Tax Slayer. The program had the same eight partners in 2025.
Current year tax returns can only be filed using IRS Free File. You cannot use this system to process returns from previous years.
Of course, filing early in the season will help you get your tax refund sooner.
But there are some new deductions for the 2026 tax season, including a tax break for tips and another tax break for overtime pay, which could make tax preparation much more complicated for those who qualify for these tax breaks.
In some cases, especially regarding tip income and overtime pay, it may be better to wait to file until IRS guidance is released further into the tax season, said Tom Oseven, registered agent and director of tax content and government relations at the National Association of Tax Professionals.
After all, do-it-yourself enthusiasts looking for a deal want to be sure they’ve done it right.
Contact personal finance columnist Susan Tompol: stompor@freepress.com. follow himr X @tompor.
