Finance Globe

U.S. financial and economic topics from several finance writers.
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2009 E-file Open for Business January 15

The IRS announced today that e-file, the electronic tax return delivery service, is open for business January 15. The most popular method of filing taxes, e-file debuted 20 years ago, delivering 4.2 million tax returns. Last year, IRS e-file delivered 95 million tax returns and is used by two-thirds of the nation's taxpayers.

"Electronic filing is more and more popular every year, and most taxpayers now e-file. IRS e-file means faster refunds. It means the option to file now and pay later if you owe additional tax. It means peace of mind knowing the IRS received the return because we send an acknowledgement. Those are the reasons this has been a popular service," said Doug Shulman, IRS Commissioner. "IRS e-file is safe, it’s easy and everyone should try it."

Last year, more than 49 million taxpayers missed out on the e-file benefits. The IRS urges taxpayers, especially those people already using tax software, to take the next step and e-file their return or ask their preparer to e-file their return. The IRS urges tax preparers who electronically file some of their clients’ tax returns to consider filing all tax returns through e-file.

The IRS says they are working on becoming faster at acknowledging accepted or rejected e-filed tax returns. For rejected returns, the IRS also plans to give more specific explanations of the errors that caused the rejection to enable taxpayers to quickly correct and resubmit their return.

Last year, taxpayers who e-filed their returns received acknowledgement within 48 hours that the IRS accepted or rejected their return. This reason alone gives much merit to e-filing; paper filers receive no acknowledgement at all of whether the IRS even received their return - that is, until they either receive their refund or their tax return is sent back to them with instructions to correct specific mistakes.

Taxpayers who e-file are much less likely to have errors on their return that can delay their refund. The IRS says that the error rate for e-filed returns is 1%, compared to nearly 20% for paper returns.

E-filing is also much faster than paper filing, in both directions - and much safer. The IRS receives the e-filed return instantaneously, and taxpayers can get their refunds in as few as 10 days when they choose direct deposit. Taxpayers even can opt to have their refund deposited into two or three financial accounts or purchase a U.S. Savings Bond.

For those who owe additional tax, e-file is still the best option. People can file now and pay later, as long as the payment is received by April 15. Taxpayers can set the date for an automatic withdrawal from their financial accounts or they can pay by credit card. People also can e-file and pay by check by simply attaching the payment to a voucher that is mailed to the IRS.

There are three ways to use e-file: through tax preparers, through most tax preparation software or through IRS Free File. The IRS does not charge for e-file. Many tax preparers and software products also offer free e-filing with their services.

IRS Free File is available to nearly everyone through two formats. For the 2009 tax year, families or individuals who earn less than $57,000 can use the Traditional Free File program. This service is a public-private partnership in which approximately 20 tax software manufacturers make their tax preparation software and e-filing available for free. To use the service, taxpayers must begin by starting at the IRS website, go to www.IRS.gov and click on Free File or www.IRS.gov/freefile.

For taxpayers whose incomes exceed the cut-off for free file, Free File Fillable Forms is a service that is available to everyone. This program is in its second year and provides free online tax forms that can be completed and filed electronically. These forms are simply electronic versions of the same paper forms found in public offices at tax time. This program is ideal for taxpayers who know how to prepare their own returns with little assistance.



Source:
Internal Revenue Service
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Thursday, 22 August 2019

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