Jan 18, 2005
Half of American taxpayers are expected to file their income tax returns electronically this year. For the third year, the Internal Revenue Service is offering its "Free File" service, with free service offerings to taxpayers who have access to a computer and the Internet.
Taxpayers can file their returns electronically either by using an e-file-approved tax professional, purchasing over-the-counter computer software or downloading Internet-based software.
Since 2003, taxpayers have been able to access free tax software and free e-filing through the IRS Web site, using what the IRS calls "a public-private partnership." The IRS and a consortium of tax software manufacturers offer free services through Free File. Last year, more than 3.5 million taxpayers used Free File. At the start of this year, the Free File program includes 15 companies, with more possible in coming weeks.
For 2005, any taxpayer with access to a computer and the Internet will qualify for Free File. Each company sets its own criteria for free usage. The criteria varies but often is based on income, state residency and age. Some have no restrictions for participation. Companies are allowed to alter their offers during the filing season.
IRS e-file has proven itself to taxpayers year after year. It is fast, accurate and secure. Its easy to use. Taxpayers can receive their refunds in half the time, said IRS Commissioner Mark W. Everson. I also would urge all tax preparers to consider electronically filing their clients returns. IRS e-file is good for business, whether you are a taxpayer or a tax professional.
The vast majority of electronically prepared returns are filed by tax professionals. However, the fastest growth rate is among taxpayers using software to prepare their own returns. The number of self-prepared computer filed returns has nearly tripled recently to 14.5 million returns in 2004 from 5 million returns in 2000.
In addition, the IRS estimates that more than 35 million tax returns each year are prepared on a computer. However, instead of using the e-file option and hitting the send button, taxpayers and tax preparers hit the print button and mail in the return. The IRS encourages these taxpayers to consider the benefits of filing electronically.
Its the fastest, easiest way to do your tax return, Everson said. There are fewer errors so there are fewer refund delays. And, if you e-file and use direct deposit, you can receive your refund in approximately two weeks.
