IRS launches e-file option

The Internal Revenue Service opened the 2012 electronic tax return filing season this week with a reminder to taxpayers that e-file remains the best way to get fast refunds and ensure accurate tax returns.

IRS e-file has surpassed the milestone of 1 billion returns processed. The electronic transmission system revolutionized the way the IRS processes tax returns and made speedy refunds possible. Nationally, more than 112 million income tax returns were e-filed last year, or 77 percent of all individual returns filed.

"E-file is the best option for taxpayers. E-file enables taxpayers to file more accurate returns and receive their refunds quickly and safely," said IRS Commissioner Doug Shulman.

E-file is secure

In general, for people concerned about security, e-file has proven itself year in and year out as a safe and secure method of filing a tax return. E-file has a proven track record. Software vendors and paid tax return preparers use the latest encryption technology. Plus, within 48 hours, an electronic acknowledgement is issued that the return has been received by the IRS and either accepted or rejected.

When using e-file, you also use an e-signature and an electronic filing PIN. If you prepare your own return using software you must use the self-select PIN method on the return.

E-file means faster refunds

With most people receiving a refund, the fastest way to get a refund is by e-filing and using direct deposit. Taxpayers can get their money automatically in as few as 10 days. Last year, more than 79 million refunds were electronically deposited into taxpayers’ accounts, saving them a trip to the bank.

More payment options

For people who owe taxes, e-file offers payment alternatives such as filing now and scheduling payment on the April tax deadline. Taxpayers who still want to pay by check can do so by e-filing and then mailing a payment voucher.

Three ways to e-file

Taxpayers can e-file their tax returns one of three ways: through a tax return preparer, through self-preparation software or through IRS Free File. The IRS does not charge for e-file. Many tax return preparers and software products also offer free e-filing with their services. Free File offers free tax preparation and free electronic filing.

New rules for tax preparers

Starting this filing season, any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. Taxpayers are encouraged to use tax return preparers who offer IRS e-file.

Taxpayers should also only use paid preparers who sign the returns they prepare and enter their Preparer Tax Identification Numbers (PTINs). Preparers are required to sign the returns they prepare and include their PTINs. Although paid preparers sign returns, taxpayers are legally responsible for the accuracy of every item on their return. Preparers are also required to give taxpayers a copy of their returns.

Free file options for everyone

IRS Free File, which has been making taxes a little less taxing for a decade, also begins today, Jan. 17. Everyone can use Free File, either the brand-name software offered by IRS’ commercial partners or the online fillable forms. Individuals or families with 2011 adjusted gross incomes of $57,000 or less can use Free File software. Seventy percent of taxpayers – 100 million people - are eligible for Free File software. It’s perfect for first-time filers, families looking to save money or older Americans adept at using the Internet.

Free File Fillable Forms, the electronic version of IRS paper forms, has no income restrictions. Free File Fillable Forms performs some math calculations and provides links to some IRS publications. It does not use the familiar question-and-answer format used by software. Taxpayers can e-file the forms for free. It also does not support state income tax returns.

“Free File can save you time and money. You can prepare and e-file your tax return at no charge. And, the software helps you find the tax breaks you are due,” said Diane Fox, director, Free File program. “Free File helps make taxes less taxing.”

Free File software is a product of a public-private partnership between the IRS and the Free File Alliance, LLC. The Alliance is a consortium of approximately 20 tax software providers who make versions of their free-file products available exclusively at www.irs.gov/freefile .

All Free File members must meet certain security requirements and use the latest in encryption technology to protect taxpayers’ information.

The easiest way to locate a software provider is to use the online “get help” tool at www.irs.gov/freefile that, with a little of a taxpayer’s information such as income, age and state residency, can identify matching free-file products. Or, taxpayers can review all providers and their offers. Some software providers also offer state income tax preparation for free or for a fee.

Also, the IRS is working with select volunteer tax sites such as Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly. There are 200 locations nationwide that have set up Free File kiosks where taxpayers can use computers to prepare their own returns with Free File.

Tags: news, updates, irs, tax