Provided by IRS.gov
WASHINGTON - The Internal Revenue Service has announced the Jan. 16 opening of an expanded IRS e-file program
for 2008 federal tax returns, highlighted by new features that will
allow expanded access to electronic filing and help people looking for
faster refunds.
IRS Commissioner Doug Shulman encouraged
taxpayers to explore e-file this year as the best option to file
accurate tax returns and get fast refunds during the current economic
downturn. The e-file program also includes new improvements to the Free
File program that will allow nearly all taxpayers to e-file for free.
"These
are tough times, and e-file is the best way for people to get cash in
their pocket quickly," said IRS Commissioner Doug Shulman. "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."
Last year the average refund was $2,429.
The IRS realizes people need their refunds quickly. Shulman urged
people who haven't e-filed before to consider the e-file option this
year.
IRS e-file totaled nearly 90 million tax returns in
2008. Almost 58 percent of all returns were filed electronically. Last
year, there was a surge in e-file from home computers. Nearly 27
million people prepared their own e-file return. That's an increase of
more than 19 percent from the previous year.
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.
A variety of tax software products are
available commercially that offer e-file. This year, several of them
will not charge additional fees for e-filing for the first time.
In
addition, most taxpayers qualify for free tax preparation offered
through Free File on IRS.gov. Regardless of income level, taxpayers who
are comfortable with filling out paper tax forms and who don't need
extra assistance can use the IRS's new Free File Fillable Forms. These
new online versions of paper tax forms that can be e-filed are
available for the first time by visiting the IRS.gov Free File site.
Benefits of e-File
Taxpayers
who use e-file and who choose direct deposit can receive their refund
in as few as 10 days. That's because with e-file, there's no paper
return going to the IRS. And with direct deposit, there's no paper
refund going to the taxpayer. So it's all electronic and much faster
than paper.
IRS e-file allows taxpayers to file their returns
now and pay later if they owe taxes. It allows taxpayers to file both
federal and most state returns at the same time.
Taxpayers
may use IRS e-file through their tax preparers, or with a computer
using tax preparation software. This software is available on the
Internet for online use or for download. Many retail stores sell the
software for offline use. The IRS does not charge taxpayers to e-file
their completed returns, but some tax preparers and software
manufactures may charge a fee. However, this year a number of large
software companies are waiving this additional fee.
To get
all the benefits of electronic filing, taxpayers must make sure that
when they are done with their returns, they take the final step of
e-filing them. Taxpayers who use a paid preparer should make sure their
preparers are taking this final step, too. 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.
E-filed tax return information is protected
through encryption. Also, taxpayers receive an acknowledgement within
48 hours that the IRS has accepted their return.
Free File
Free
File, which is a form of e-file, is a free federal tax preparation and
electronic filing program for eligible taxpayers developed through a
partnership between the IRS and the Free File Alliance LLC. The
Alliance is a group of private-sector tax software companies. Since
Free File's debut in 2003, a total of more than 24 million returns have
been prepared and e-filed through the program.
Free File
offers 20 different software options that can assist taxpayers with an
Adjusted Gross Income (AGI) of $56,000 or less in 2008 to e-file their
federal tax returns for free. That means 70 percent of all taxpayers -
98 million taxpayers - can take advantage of tax software that will
help them complete their returns through the Free File program. Three
companies are offering their products in Spanish.
This year,
the IRS and its partners are offering a new option, Free File Fillable
Tax Forms, which opens up Free File to virtually everyone, even those
whose incomes exceed $56,000.
Free File Fillable Tax Forms
allows taxpayers to fill out and file their tax forms electronically,
just as they would on paper. This option does not include an
"interview" process like the other Free File offerings, but it does
allow taxpayers to enter their tax data, perform basic math
calculations, sign electronically, print their returns for
recordkeeping and e-file their returns. This "self-service" option may
be right for those who are comfortable with the tax law, know what
forms they want to use or don't need assistance to complete their
returns.
Both the fillable-forms option and the previously
available "full service" Free File offerings are available only through
the IRS.gov Web site. Both new and returning taxpayers must access Free
File through IRS.gov. Otherwise, the e-file provider may charge them a
fee. Look for details on IRS.gov beginning Jan. 16.
Almost
4.8 million tax returns were filed through Free File last year, an
increase of 24 percent over the previous year's total of nearly 3.9
million returns.
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