Both file for $0 with no upsells. Cash App Taxes files federal and state free and handles most return complexity (including self-employment). IRS Direct File is the government-run option for simple W-2 returns, available in a limited set of states. Pick Cash App Taxes to file a more complex return for free; pick Direct File if you have a simple return in a participating state and want to file straight with the IRS.
Block, Inc.
Free federal AND state filing — no upsells, no premium tier.
Pros
U.S. Internal Revenue Service
Free, government-run filing for simple returns — no upsells, ever.
Pros
Pick Cash App Taxes if: Cash App users with relatively straightforward returns who want zero-cost filing.
Pick IRS Direct File if: W-2 employees with straightforward returns who live in one of 25 participating states.
Apply at Block, Inc. →Apply at U.S. Internal Revenue Service →
IRS Direct File is available only in participating states. For the 2025 filing season, the IRS expanded Direct File to 25 states — but coverage changes year to year. Filers in non-participating states cannot use Direct File for their state return. You can check the current state list at irs.gov/directfile. In addition to state availability, Direct File only supports simple tax situations: W-2 income, limited credits (Child Tax Credit, Earned Income Credit, etc.), and basic deductions. It does not support self-employment income, itemized deductions, or most investment income.
Yes — Cash App Taxes (operated by Block, Inc.) files federal and state returns for $0 including Schedule C for self-employment income, Schedule SE for self-employment tax, and most common forms. This sets it apart from IRS Direct File, which does not support Schedule C. Notable limitations: Cash App Taxes does not support multi-state returns (if you earned income in more than one state), professional gamblers (Schedule C type), or prior-year returns. For free self-employed filing, it is one of the only $0 options that covers Schedule C. Verify current supported forms at cash.app/taxes.
Yes — IRS Direct File is operated by the IRS and has no hidden fees. It is best for filers in a participating state who have only W-2 wages, standard deduction, and perhaps basic credits like the Child Tax Credit or EITC. If that describes your return, Direct File lets you file directly with the IRS without routing through a third-party software company — appealing for filers who prefer government infrastructure. Cash App Taxes is the better choice for anyone outside a participating state, with self-employment income, or who needs a slightly more guided interface for a more complex return.
Yes. Cash App Taxes (operated by Block, Inc.) supports Schedule D and Form 8949 for capital gains and losses, 1099-B from brokerage accounts, and crypto gain/loss reporting — all at $0. IRS Direct File does not currently support investment income: filers with 1099-B, Schedule D, or crypto transactions cannot use Direct File and must use a third-party platform. For investors seeking a completely free filing option that covers Schedule D, Cash App Taxes is one of the few platforms doing so at no cost. Verify current supported forms at cash.app/taxes and irs.gov/directfile. Source: IRS Direct File FAQ at irs.gov.
Yes. Cash App Taxes includes a Maximum Refund Guarantee and an Accuracy Guarantee — if a Cash App Taxes software error causes you to owe IRS penalties or interest, the company covers it (subject to terms and accurate user input). Cash App Taxes does not include professional audit representation. IRS Direct File is a government-operated tool and carries no private accuracy guarantee; it does provide the IRS's own built-in calculation validation. For filers who want a private accuracy guarantee at $0 cost, Cash App Taxes has the structural advantage over Direct File. Verify current guarantee terms at cash.app/taxes.
IRS Direct File explicitly does not support: self-employment income (Schedule C), investment income (Schedule D / 1099-B), rental income (Schedule E), itemized deductions (Schedule A), most business credits, multi-state returns, or prior-year returns. It is designed only for W-2 wage income, standard deduction, and specific common credits (Child Tax Credit, EITC, Child/Dependent Care Credit, and some education credits). The IRS publishes a complete list of supported situations at irs.gov/directfile — check it before starting your return to confirm eligibility. If any unsupported situation applies to you, Cash App Taxes, FreeTaxUSA, or a commercial provider is the appropriate tool. Source: IRS Direct File eligibility guide at irs.gov.
IRS Direct File covers only your federal return directly. For participating states, Direct File integrates with the state's own free filing tool — after completing the federal return, filers are redirected to the state's platform to complete the state return, often at no charge through state-provided tools. Not all participating states have this integration, and state return options vary by state. Cash App Taxes files both federal and state returns entirely free within its own platform, with no redirect required. If a seamless single-platform experience for both federal and state is important, Cash App Taxes provides a more integrated workflow. Source: IRS Direct File state integration information at irs.gov/directfile.
Both platforms support IRS direct deposit, which the IRS states is the fastest refund method — typically within 21 days of acceptance for most e-filed returns. With Cash App Taxes, you can choose direct deposit to any bank account or to your Cash App account. IRS Direct File deposits to the bank account you specify. There is no meaningful speed difference between the two for direct deposit refunds — the IRS processes the refund, not the software provider. Paper check refund (available if you don't provide bank info) takes 4–6+ weeks with either option. Track refund status at irs.gov/refunds after filing. Source: IRS refund timing guidance at irs.gov.
Cash App Taxes is operated by Block, Inc. (formerly Square), a publicly traded financial technology company subject to federal and state financial data regulations. Cash App Taxes uses IRS-required TLS encryption for return transmission and encrypts stored data at rest. Your return is transmitted to the IRS using the same authorized e-file infrastructure as TurboTax and H&R Block. IRS Direct File is operated directly by the Internal Revenue Service and stores data within IRS systems subject to IRC Section 6103, which governs confidentiality of tax return information. Both are government-authorized, legitimate filing options. Source: IRS security standards at irs.gov; Block Inc. at block.xyz.
Cash App Taxes supports resident aliens filing as U.S. residents for tax purposes (Form 1040) but does not support nonresident alien returns (Form 1040-NR). IRS Direct File also only supports Form 1040 and is not available for nonresident aliens. Both tools are designed for U.S. citizens and qualifying resident aliens. Nonresident aliens need separate software or a tax professional. Tax residency status is determined by the IRS's Substantial Presence Test or Green Card Test — consult IRS Publication 519 (U.S. Tax Guide for Aliens) at irs.gov/publications/p519 if your status is unclear. (Not immigration or tax advice; consult a qualified professional for complex residency situations.)
Independent editorial comparison. ClearValue Lending is not the issuer of any product compared here; affiliate links may pay a referral commission at no cost to you — selection is independent of compensation.