Are You Filing Your Taxes Electonically?

Now more than ever e-filing is easy, safe and often free.


If you haven’t tried it yet, now’s a great time to file your federal tax returns electronically. Nearly 80 percent of taxpayers now do it and the IRS has processed more than 1 billion individual tax returns safely and securely since the nationwide debut of electronic filing in 1990.

In fact, last year, 112 million people – 78 percent of all individual taxpayers – used IRS e-file to electronically transmit their tax returns to the IRS. And now, if your adjusted gross income is less than $57,000, you can also e-file for free.

The number of people who use a paper tax return or who mail a tax return dwindles each year – and for good reason

  • E-filing is safe and secure. Software providers must meet strict guidelines and provide the best encryption technology. You receive an acknowledgement within 48 hours that the IRS received your return. If the IRS rejects the return, the receipt will explain why so you can quickly correct and resubmit.
  • You get your refund faster. An e-filed tax return normally means a fast refund. If you combine e-file and direct deposit the IRS can typically issue your refund in as few as 10 days. About three of four taxpayers receive a refund and last year the average refund was approximately $2,900.
  • You get more payment options. If you e-file you can file early and set an automatic payment withdrawal date for any date on or before the April due date. You may also pay by paper check or even by credit card.
  • It’s gotten to be pretty easy. You can e-file through your tax preparer, use commercial tax preparation software or through Free File, the free tax preparation and e-filing service available exclusively at http://www.irs.gov.

Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing 11 or more Form 1040 series returns, Form 1041 returns or a combination of both generally must use IRS e-file.  These tax return preparers must be authorized IRS e-file providers so they can transmit tax returns electronically. More information for paid preparers is available at http://www.irs.gov.

And now, anyone with an adjusted gross income $57,000 can e-file for free through the IRS Free File Program. Free File is offered through a public-private partnership between the Internal Revenue Service and tax software companies. Free File can help you do your taxes fast; it’s safe and it doesn’t cost anything.

Free File offers two options: easy-to-use software or online fillable forms.

Nearly 100 million Americans – that’s 70 percent of the nation’s taxpayers – can use the free brand-name software and secure e-filing offered by private-sector companies. Software products also are available in Spanish. Each company sets its eligibility requirements, generally based on income, age or state residency. However, if your adjusted gross income was $57,000 or less in 2011, you will find at least one tax software product to use.

Here’s how it works: You must access Free File through the IRS website. At http://www.irs.gov/freefile, there’s an online tool that allows you to give a little information about yourself then guides you to the software for which you are eligible. Or, you can review a complete list of companies and their offerings and make a selection.

Once you select a software product, you will be directed away from the IRS website and onto that company’s website. There, the software will generally offer you a step-by-step guide through the tax preparation process.

Free File does all the hard work. You don’t need to be a tax expert; the software will help find tax breaks, such as the Earned Income Tax Credit, that you may be due. The software asks the questions; you supply the answers. It will find the right tax forms and do the math. Free File has a high satisfaction rate among its users, 98 percent recommend it to others. The IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.

A word about security: All Free File companies use the latest in secure technology. The safety of taxpayer information is everyone’s priority. Since it started in 2003, some 36 million taxpayers have safely and securely used Free File.

Some companies provide state tax return software as well– sometimes for free and sometimes for a fee.  Some states also have a relationship with the Free File Alliance; those states are listed on the companies’ websites.

Free File Fillable Forms Is Another Free Option

For people who make more than $57,000 or who are comfortable preparing their own tax return, the IRS offers Free File Fillable Forms. It also must be accessed through http://www.irs.gov/freefile. There is no software assistance with Free File Fillable Forms, but it does basic math calculations for you. It does not support state income tax returns, but it is perfect for the true do-it-yourself taxpayer who prefers paper tax returns. Free File Fillable Forms also offers free e-filing.


Bob January 23, 2012 at 11:04 PM
I would never file electronically. Good old fashioned paper forms which I fill out and submit by mail.


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