Accounting
IRS Direct File free tax pilot enticed 140K taxpayers
The Internal Revenue Service’s Direct File free tax filing pilot program officially closed Friday and reported that 140,803 taxpayers used it in the 12 states where it was available.
The IRS
The leading states with accepted returns included California (33,328), Texas (29,099), Florida (20,840), New York (14,144) and Washington (13,954). Across the 12 pilot states, taxpayers using Direct File claimed more than $90 million in tax refunds and reported $35 million in tax balances due.
“Last week, the IRS concluded one of the most successful filing seasons in recent memory, which saw monumental progress in our efforts to transform the taxpayer experience as directed under the Inflation Reduction Act,” said IRS Commissioner Danny Werfel during a press conference Friday. “The conclusion of the 2024 filing season also marks the closure of the Direct File pilot, a yearlong effort to study the interest in and feasibility of creating a direct e-filing system people can use to file their federal income tax return. Direct File is an important part of our efforts to meet taxpayers where they are, give them options to interact with the IRS in ways that work for them, and help them meet their tax obligations as easily and quickly as possible.”
More than 3.3 million taxpayers started an online eligibility tracker to see if they could use Direct File; 423,450 taxpayers logged into Direct File; and 140,803 taxpayers submitted accepted returns. In cases where users’ tax situation was out of scope for the pilot, they were directed to other options to complete their tax returns, including the separate Free File program that provides free software from the private sector, Werfel noted.
Wally Adeyemo, deputy secretary of the Treasury, said he met last week with finance ministers and central bank governors from the U.K., Australia and other countries and told them about how excited he was about the Direct File pilot. They were surprised because many of their countries have long offered free tax filing similar to Direct File.
Over the course of the pilot test, he said Direct File users saved an estimated $5.6 million in tax preparation fees on their federal returns alone. He said he has talked with taxpayers in states like Texas, New York and Washington, and many of them said it took less than a few hours to file their taxes using Direct File. He also cited survey figures indicating that 90% of respondents ranked their experience with Direct File as excellent or above average, and 90% of the respondents who used customer support also ranked the experience as excellent or above average.
“Direct File not only saved people money, not only saved people time, but helped people have a good experience with the IRS because ultimately our goal is to make sure the IRS works for the American people, both helping them do what the vast majority of them want to do without prompting, which is file their taxes in a way that is easy and safe and also in this case free,” said Adeyemo.
Through the end of the pilot, the total amount spent by the IRS was $24.6 million, including a
“It’s important to remember that Direct File is a new technology product,” said Werfel. “With any new product, you have fixed development costs. The cost per user only decreases as more people use the product. We intentionally designed this pilot not to have a large number of users in order to focus on delivering a strong, stable product.”
Separately, a new
Compared to individuals who filed using other methods such as professional tax preparers, paid software or self-preparation, the research found that Direct Filers are much more likely to say the process is simpler, cheaper and faster. Some 61% of users reported that tax filing this year was more straightforward than last year when Direct File was not available (compared to 25% among those who used other filing methods saying the same). In addition, 44% of Direct File users said tax filing was less expensive than last year (as opposed to 10% among others). Over a third (36% versus 13% among others) said that tax filing took less time than last year, with more than 60% of Direct File users being able to file in under an hour.
“The two essential things the IRS needed to do to make this year’s pilot a success were to build a stable tool that worked and to make sure that users liked it and found it easy to use,” said Adam Ruben, vice president of campaigns and political strategy at the Economic Security Project, in a statement. “This survey shows that Direct File users loved this free and simplified tax filing option and found it simpler, cheaper and faster. That makes this year a big win and a strong foundation for expanding Direct File next year to more states, more tax situations, and with the IRS filling in more of the data it already has.”
The Financial Accounting Standards Board released a
The paper pointed out that construction businesses are often subject to contracts that contain retainage (or retention) provisions.
Companies that operate in the construction industry are frequently subject to contracts that include retainage provisions. Those provisions generally offer a kind of security to the customer by permitting the customer to withhold a portion of the consideration billed by the company until certain project milestones are met or the project is finished.
The revenue recognition standard, also known as Topic 606 or ASC 606 in FASB’s Accounting Standards Codification, offers guidance on the presentation of a contract with a customer on the balance sheet as a contract asset or a contract liability and related disclosures, but lacks specific guidance on retainage.
The educational paper explains the presentation and disclosure requirements in GAAP about retainage for construction contractors and provides some examples of voluntary disclosures of retainage that would provide more detailed information about contract asset and contract liability balances.
The FASB staff received feedback from private company stakeholders in the construction industry, as well as the FASB-affiliated Private Company Council, questioning the proper application of Topic 606 guidance to retainage. Some users of private company financial statements, including sureties, provided feedback that information about retainage is important to their analysis.
The educational paper aims to clarify the presentation and disclosure requirements in GAAP about retainage for construction contractors and provide example voluntary disclosures of retainage that would currently be permissible under GAAP and would provide users with more detailed information about contract asset and contract liability balances.
The educational paper doesn’t change or modify current GAAP and isn’t intended to be a comprehensive assessment of the accounting for retainage in accordance with Topic 606. The exhibits included in the paper are for illustrative purposes and don’t create additional requirements beyond those in current GAAP. Entities should refer to current GAAP and consider entity-specific facts and circumstances when preparing financial statements.
Hourly earnings and job growth for workers in small businesses remained mostly unchanged last month, according to payroll provider Paychex.
The
The national Small Business Jobs Index dipped 0.29 percentage points to 99.75 in March, slightly less than the pace set at the end of the past two quarters. At 2.91%, hourly earnings growth stayed below 3% for the fifth month in a row in March, while one-month annualized hourly earnings growth (3.51%) outpaced annual growth (2.91%) for the fourth consecutive month.
“We don’t see any signs of recession,” said Frank Fiorille, vice president of risk, compliance and data analytics at Paychex. “It looks like they’re still doing OK, not gangbusters, but still keeping up with the range that they have done the past few months.”
The Midwest remained the top region for the 10th consecutive month on small business job growth, despite slowing 0.58 percentage points in March. Texas continued to lead the other states on small business job growth in March, while Minneapolis gained 1.87 percentage points to move into first place in March among metropolitan areas. The manufacturing industry gained 1.05 percentage points during the first quarter of 2025 to perform best among the industry sectors on job growth.
On the wage front, Tampa topped the other metro areas in March in terms of both hourly earnings growth (4.20%) and weekly earnings growth (4.00%).
Fiorille doesn’t see much impact on small businesses yet from the tariffs that President Trump administration has
He advises accountants to keep an eye on further developments on tariffs, tax changes and the steady stream of executive orders from the White House.
Prague & Co. was founded in 1988 and has a team of 15 professionals. Its services include accounting, tax and fund administration services to individuals, partnerships and corporations worldwide.
The firm focuses on high-net-worth individuals and alternative investment vehicles engaged in the real estate, timber, private equity and venture capital sectors. (The law firm of Prague & Peters PLLC is not part of the combination and will remain an independent law firm.)
“With 37 years of dedicated service to our clients, I’m proud of how our tax and accounting practice has grown while still adhering to the highest levels of quality and personal attentiveness. In evaluating the next steps and how to offer even more, combining with EisnerAmper provides the perfect solution. We’re excited about what this means for our clients and our team,” said founder Andrew Prague in a statement Tuesday.
Financial terms of the deal were not disclosed. EisnerAmper’s Eisner Advisory Group ranked No. 15 on Accounting Today‘s list of the
“With each client, Prague & Company works to understand the intricacies and nuances of each situation and then provides tailored guidance,” said Jay Weinstein, EisnerAmper’s vice chair of industries and markets, in a statement. “As we look to the future, the team at Prague & Company will enhance our Boston presence while deepening our expertise in trusts, estates, foundations, nonprofit organizations, and closely held businesses. We warmly welcome them to the EisnerAmper family.”
EisnerAmper has been busy on the M&A front since it
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