This year the federal government has developed an excellent new program that will allow millions of Americans to electronically file their taxes for free.
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Free File will allow at least 60 percent of Americans to prepare and file their federal taxes electronically without additional filing costs. A group of tax software companies called Free File Alliance, LLC, has worked with the IRS to provide free online tax preparation and electronic filing services. You can access this service through irs.gov.
Electronic filing has caught on quickly. Most taxpayers find IRS e-file faster, simpler and more convenient then mailing in forms. Since the system automatically scans the returns as they come in, the e-file error rate for individual taxpayers is less than one percent. This is much lower than the error rate of paper forms. Also, within 48 hours of hitting the Submit button, e-filers receive a Proof of Receipt that indicates that the file has been accepted or that it needs correction for an error. E-filing has become so popular that the IRS expects more than 50 million taxpayers to file electronically this year.
For most, e-filing is especially appealing because electronic taxpayers can receive their refunds in about half the time as traditional filers. If you give the IRS your bank account information, they will use direct deposit and your refund can appear in your account in as little as ten days. If you find that you owe money you can pay electronically with an electric transfer from their bank account or a credit card. If you file your tax return early, your payment amount does not have to accompany the filing. As long as it is paid by April 15th, you are in the clear.
Eligibility for a particular free file service will be dependent on the requirements set forth by each Free File Alliance member. In general, these requirements may be one or any combination of the following: Age; Tax Year 2002 Adjusted Gross Income; Eligibility to file Form 1040EZ; Eligibility to claim the Earned Income Credit; State residency; and Active duty military status (if applicable). In most cases, those who are married and filing jointly, need to have only one partner meet the eligibility requirement. Although this sounds complicated, it is pretty clearly spelled out at the IRS Web site at www.irs.gov. Just click on the obvious link that says “Fee Online Filing – Are You Eligible?”
As part of their new online services the IRS has also initiated a special feature on their Web site called “Where’s my refund?” This is a secure area that where you can find out when the IRS received your tax return and the exact status of the processing of your refund.
This is just one example of how the Internet has impacted our lives for the better. There is probably nothing that can make paying taxes a pleasant experience, but the Internet has made it a little faster and a little easier.
