Finance Globe

U.S. financial and economic topics from several finance writers.
4 minutes reading time (786 words)

IRS Expands Free File to Most Taxpayers for Tax Year 2008

The Internal Revenue Service announced yesterday that the e-file program will open on January 16, 2009, with new features that expand access to electronic filing to help taxpayers get their refunds quicker.

E-filed tax returns are safe - all tax information is protected through encryption. Plus, the tax preparation software used to e-file helps prevent many of the mathematical errors that can delay an expected refund.

"IRS e-file meets the needs of nearly all taxpayers, no matter how complicated or simple their returns are. E-file helps taxpayers take advantage of the tax credits available to them to maximize their refunds during these tough economic times."

And for tax year 2008, the IRS has introduced "new improvements to the Free File program that will allow nearly all taxpayers to e-file for free."

Free File's debut in 2003 was developed as a partnership between the IRS and a group of private sector tax preparation companies -three of which offer their products in Spanish - known as the Free File Alliance, LLC.

Tax payers must have an Adjusted Gross Income (AGI) of $56,000 or less for the tax year 2008 to be eligible for this version of Free File. The IRS estimates that 70% of all taxpayers, about 98 million, will qualify to take advantage of tax software through the Free File program. The program walks taxpayers through the process of e-filing their own tax returns and even first-timers will find it simple to use.

But the IRS and its partners have introduced a new program for taxpayers this year, the Free File Fillable Tax Forms. This form of electronic filing opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Free File Fillable Tax Forms can be the right product for taxpayers who are familiar with the tax laws and are used to doing their own taxes on paper. These forms are simply online versions that can be e-filed.

The main difference between this and the original Free File program is that it skips the interview process that helps taxpayers determine which tax deductions and credits they are eligible for and what forms they should use.

If you're comfortable doing your own taxes, the Free File Fillable Tax Forms allows you to benefit from the added accuracy, security, and speed of e-filing your tax return - at no cost to you.

IRS Commissioner Doug Shulman encourages taxpayers to e-file their tax returns. "These are tough times, and e-file is the best way for people to get cash in their pocket quickly," he said. "Filing electronically with direct deposit can get refunds to taxpayers in as few as 10 days. Combined with important changes in the Free File program, we believe e-file is a better option than ever before for the nation's taxpayers."

To use either form of Free File, taxpayers will need to start the tax return process at www.irs.gov and follow the Free File directions on the IRS website. Start at the IRS website even if you used Free File last year. If you go straight to the tax preparation company's website, they are likely to charge you their normal tax filing fee.

With Free File, the federal tax return is prepared and filed for free. Most state returns can also be prepared at the same time as the federal return, but there may be a filing fee of about $20 to $30. Or, you can opt to file your state return separately, on paper the old-fashioned way, and pay no fee.

When you complete your return through the Free File program, you can either e-file it right then or print it off and mail it.

Some taxpayers may be required to mail in a printed tax return anyway if certain types of credits are claimed, for example, a credit that requires proof of eligibility with documentation or some sort of certificate. Either way, it's a good idea to print one copy of your tax return for your records.

But most taxpayers will be able to e-file their returns, and the IRS encourages it. "In addition to error checks contained in the return-preparation software, additional checks are done during the e-file transmission process. That's why the error rate is so low for e-filed returns. In fact, the error rate is significantly reduced from 20 percent with paper returns to about 1 percent with e-filed returns."

The IRS reported that the average tax return was over $2400 last year and that almost 58% of all returns were filed electronically. E-filing has grown increasingly popular since the IRS first made it available nationwide in 1990 when 4.2 million tax returns were filed electronically. Last year, nearly 90 million tax returns were e-filed.


Source:
Internal Revenue Service
The Student's Guide to Banking
Homeowners Rush to Refinance at Record Low Interes...
 

Comments

No comments made yet. Be the first to submit a comment
Guest
Thursday, 28 March 2024

Captcha Image

By accepting you will be accessing a service provided by a third-party external to https://www.financeglobe.com/