Online Tax Filing for FREE

Tax Seasons has Started, Its now time for E-filing your tax return

2011-02-28T01:43:00.000-08:00

Its that time of year for every American who has tax owed to them. That's right, it's tax season and soon everyone will begin receiving their W2s from their employers. Once they receive this, its a matter of time of receiving their tax return. But what should you do when it comes time to figuring out what method to file your taxes?

The answer... Electronic Filing with BestTaxFiling...

eFiling is the wave of the future. For a few reasons which I have listed below:

1) Save the Tree's - Some wouldn't really care about this small little detail but they should. eFiling saves tree's which of course produce oxygen. If you think about it, with the global warming issue we need as much tree's as possible to cleanse the air.

2) Faster Returns - I am no professional tax preparer so I can't say how fast paper filing returns, but its a well known fact that eFiling generally reports a 2 weeks or less return timeframe. And you can have your money deposited into your bank account which saves having to find a place (or bank) to cash your return check.

3) Accuracy Checks - Some computer software apparently have mechanisms to check the accuracy of your tax return forms. This is usually good to keep from reporting bad information to the IRS that could cost you. Even if TaxAct does clearly state they will pay any penalty fee's for any accuracy issues.

4) Save Money - Once again, please note, I am NOT a professional so the following fact isn't guaranteed. Companies like Jackson Hewitt, H&R Block, etc. usually charge to file your taxes for you. What that rate is I don't know but H&R Block allow you to eFile your FEDERAL taxes for FREE! State eFiling cost's a little bit to do but usually doesn't cost that much. TaxAct charges around $13.95 for each state filing.

5) Get Help from Professionals - Some tax software allows you to receive professional help. Although its supposed to be an automated step-by-step process to completing your IRS tax forms, some people get stuck. Therefore, help is always offered to those who PURCHASE the tax software. TaxCut offers help from any H&R Block branch which is good. If you get stuck you can always call them up for assistance.

So the bottom line is that when it comes time to file your taxes, the advantages of eFiling highly outweigh the option of filing on paper. There are so many more reason's why you should eFile but I figured the 5 items listed above should be enough to make you think twice.

Keep in mind the 5 reasons I listed and how much more effective eFiling is compared to filing on paper. I'd recommend anyone looking to purchase tax software to purchase it directly from the website and download it. That to saves you from having to run out to your local electronics store and picking it up, BUT, only if you have broadband internet access. That's because a majority of the tax preparation software are LARGE files (we're talking 5MB and above.)

The Five Filing Status Possibilities.

2011-01-14T02:05:00.000-08:00

Everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

There are two things to consider when determining your filing status:

First, your marital status on the last day of the year determines your filing status for the entire year. Secondly, if more than one filing status applies to you, choose the one that gives you the lowest tax obligation.

Here are the five filing status options:

1. Single. This will generally apply to anyone who is unmarried, divorced or legally separated according to your state law.

2. Married Filing Jointly. A married couple may file a joint return together. If your spouse died during the year, you may still file a joint return with that spouse for the year of death.

3. Married Filing Separately. A married couple may elect to file their returns separately.

4. Head of Household. This generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

5. Qualifying Widow(er) with Dependent Child. You may be able to choose this filing status if your spouse died during 2006 or 2007, you have a dependent child and you meet certain other conditions.

Electronic Tax Filing with Best Tax Filing

2010-03-27T03:57:00.000-07:00

The advantages of electronic tax filing are numerous, and, depending on the complexity of your tax return, may save you a significant amount of time and money. Let's take a look at the typical citizen doing a tax return so that we can compare the paper option and the electronic option. They both start out the same way.

It's up to the taxpayer to keep records of expenditures that are deductible, such as charitable contributions. The taxpayer is also in charge of doing some calculations, such as adding up deductible expenses, W2 gross pay amounts, and W2 taxes paid. It's even up to the taxpayer to make the decision as to how to complete a tax return.

Currently, as a taxpayer, you have three choices. You can do your own return on a paper form that you get in the mail, from a library, or at a post office. You can go to a local or national tax preparation company. Finally, you can choose the newest option, electronic tax filing.

In all three cases, responsibility for collecting tax documents is yours. Tax preparers can charge hundreds of dollars. Doing it yourself can be confusing. By using an online tax filing company, you will find yourself guided through the process step-by-step, beginning with questions designed to determine which form you should use. Then you will be asked questions relating to every line on the form, and, in some cases, you will learn about deductions you may not have realized you could take. Next your return will be checked for unusual entries. Finally, you can file online, opt for direct deposit, and get your return within days.

Online Income Tax Filing Tips

2010-02-11T00:44:00.000-08:00

As we move into April, tax deadlines are on the horizon. Since getting taxes prepared is pretty low on most people’s list of things to do, you might need some last minute tips.

First and foremost, you have a couple extra days to file this year. The usual April 15th deadline falls on a Saturday this year. As a result, the tax filing deadline is now the following Monday, April 17th.

Preparing tax returns is a complex matter. If you don’t believe me, just try reading one set of instructions kicked out by the IRS. Instead of doing a sloppy preparation, you might want to get more time. 4868 is the form you need to file.

To the surprise of many, the IRS has a pretty lax attitude towards April 15th. It gives extensions without a problem. In fact, just filing form 4868 will get you an automatic extension until October to get your return in.

Taxpayers often misunderstand tax filing extensions. The extension only applies to the actual filing of the tax return. Unfortunately, it does not require to the payment of money. The IRS wants its cash now, so you need to pay something if you think you will owe.

Nothing is worse then preparing your return and then realizing you don’t have enough money to pay the amount due. This leads to quandary and massive headache. Is there any potential relief?

The steps taken by most people is, well, to take no steps at all. They simply don’t file in hopes that they can do so later when they have the cash to pay. This is not the best of ideas.

Not filing a tax return sends up red flags at the IRS. To avoid this, you should file regardless of whether you can cover the amount due. Send in your return as well as the amount you can pay. The IRS will then set you up on a payment plan.

You are probably wondering what the difference is between the approaches. Ultimately, the second approach saves you money. Why? Well, the interest and penalties you pay will be based on a smaller outstanding debt because you sent at least some money in.

If you are ready to pay your tax liability, there are a couple of ways. You can pay by check as has always been the case. You can also pay by credit card by going to officialpayment[dot]com. You will pay a service fee for using the online system.

Many people are happy to learn they are actually due a refund on their taxes. If you fall into this group, you might want to know when the heavenly money will be coming.

Top Four Tax Filing Mistakes

2010-01-22T21:06:00.000-08:00

It's safe to say that most taxpayers prefer to keep their relationship with the IRS from getting personal. If you agree, your best strategy is to prepare and submit a tax return that is free from ambiguities and red flags. But not making waves doesn't mean paying more in taxes than you have to. Minimize your tax liability and keep the IRS happy by avoiding these common filing mistakes.

Overlooked tax credits and above-the-line deductions
Each year, the taxman collects millions of dollars in overpaid taxes thanks to taxpayers who don't claim all of the deductions and credits available to them. Many of these opportunities are available for everyone, even those who don't itemize. The so-called 'above-the-line' deductions include student loan interest, tuition expenses, moving expenses, and alimony paid. Tax credits are available for child and dependent care expenses, education expenses, and IRA contributions made before April 15th of the following tax year.

The standard deduction
Itemizing your deductions may be more complicated, but it will often save you money. By itemizing, you can reap tax benefits for your mortgage interest, charitable contributions, non-reimbursed employee expenses, and qualified medical and dental costs. You should also pay attention to the extended deductions, which are easy to overlook: state sales taxes paid, educators' out-of-pocket expenses, and tuition and fees. Extended deductions aren't mentioned on your tax forms, because they were approved after the 2006 forms went to print. Most professional tax preparers and the major brands of tax software have adjusted their forms to provide tax help on these deductions.

Incomplete documentation
A complete set of supporting documents is vital to the efficient processing of your return. If the IRS cannot verify the information that you provide, it may decide to make its own adjustments. This might mean smaller tax refunds for you or, worse, larger tax bills. Avoid these unpleasant surprises by including all required income and deduction documentation.

Typos and calculation errors
Once you have your deductions and credits sorted out, you might feel the urge to get that return in the mail as soon as possible. But wait-typos and calculation errors can cause mass confusion and processing delays. If you input your bank account number incorrectly, for example, your direct deposit refund could end up somewhere else, or nowhere at all. More common mistakes include incorrect social security numbers and inaccurate arithmetic. Double-check your return for math and typos before you take it to the post office.

Somewhere, an IRS employee is breathing a sigh of relief, because there'll be one less tax return flagged for an incorrect social security number. And when the IRS is happy, you're happy too.

How Will You File Your Taxes?

2009-12-08T20:52:00.000-08:00

When it comes to sending your tax return to the IRS, you’ve got two major ways; either you can mail it on paper or e-file it. You can choose one of them as per your convenience. Filing on paper is somewhat cheaper but refunds take longer time. On the other hand, online tax filing is safer, faster, and more convenient compared to paper filing. Moreover, by e-filing your return, you’ll get your refunds faster.

Prior to submitting your tax return, you have to get it prepared by either yourself or by a professional tax preparer or by a reliable tax preparation services. You can also prepare your taxes easily using online tax software. Once you get your tax return ready, you can think of choosing the best way to submit it to the IRS. Nothing more convenient, easy, and faster than e-filing taxes online.

These days, the majority of taxpayers use electronic filing taxes because of certain advantages. If you prefer online tax filing or e-filing, you’ll get confirmation message that your tax return is reached the IRS. As you get this proof, you rest assured that it has started processing your return. Suppose the IRS rejects your tax return, you’ll get rejection notice. Moreover, the IRS will send you e-file rejection letter mentioning how you can fix your tax filing process and make it acceptable.

As you e-file your tax return online, your refunds would be processed faster. The IRS does not have to re-type your return if you e-file your taxes. If there is no re-typing of your return by the IRS at their service center, there are less chances of making mistakes while processing your tax return.
File your taxes online carefully, either on your own or by the best tax filing service or company and get your refunds faster way possible.

Why Will You Submit Your Taxes Electronically?

2009-11-08T04:13:00.000-08:00

As tax season draws nearer, all taxpayers are concerned about income tax preparation. You can either go for a tax preparation service or do it for yourself. You can learn how to prepare and submit your taxes online using some of the best online software and tools available. Learn how e-filing taxes help you get your tax refund quickly and easily.

As you get your W-2, you’re prepared mentally for tax filing. The major concern of the tax payers is to get fast tax refund. You can submit your taxes electronically and get rapid tax refund. Filling your taxes online will get you certain benefits.

It is really a good idea to file taxes online because it helps you get permanent e-record of your annual tax return. If you’re in habit of online tax filing, you have a perfect electronic record of your tax return of each year. If the necessity arises to trace the record of your tax return of a particular year, it will make it easy for you to find out the record of your tax return at just few clicks.

If you have a business or assets, filling taxes online will be very easy, convenient and beneficial. You can easily find out the latest forms that you’ll need while preparing and doing tax filing online. You can easily locate your W-2 electronically. You’ll come across hosts of tax preparation software and audit protection tools that can help you find your mistakes and let you correct them. This will minimize the chances of receiving an audit.

Most taxpayers wish to get their money back as soon as possible. And with online tax software or programs and using direct deposit, you can get your return within 8-10 days. All you have to do is to learn how to prepare online taxes on your own and how to file them electronically.
Once you’ve prepared taxes online, you need to choose an electronic tax software or program. IRS e-file and TurboTax are some of the best and convenient online tax filling programs that you can use for your own benefit. Income tax filing your taxes electronically is really easy and convenient once you learn how to do it.

It is fairly good idea to submit your tax return using an IRS approved electronic filing system. TurboTax is well-known best tax filing program used by many taxpayers. Even novice taxpayers, using this user-friendly program, can easily perform deductions and get benefitted from its auditing protection tools. Just answer some questions and the program will automatically determine the tax forms suitable to your needs. One of the most remarkable advances of using TurboTax is that it can transfer the data from your preceding year’s returns and the data from your federal returns into state returns.

Online tax preparation and choosing to file taxes online will not only benefit you saving time but also help you getting your return faster.

Online Tax Filing: Why File Taxes Online?

2009-10-08T03:29:00.000-07:00

Online tax filing provides quick and easy way to file your taxes. Even if you have never filed taxes before, online tax filing will get you through the process, fast and without difficulty.

Why File Taxes Online?

With online tax filing, you are guided step by step to ensure that your tax returns are accurate. Online tax filing makes your life easier. It works with the IRS system, eFile, which electronically files your tax returns. There is no need to worry about missed deadlines because you wont have to send them by mail. At the end, you only need to click a button to send your tax returns. You can also print out a copy for your records.

With online tax filing, you wont have to pay a tax professional fees to get your taxes filed. Because online tax filing systems are designed to catch errors, you dont have to worry about your information being wrong. Also, online tax filing offers deductions tools so you can accurately enter your deductions and maximize your tax refund.

You can also opt to receive your tax refund check via direct deposit. With online tax filing, all you have to do is enter your bank account and routing numbers to request a direct deposit. The best part is that you will receive your refund check in half the time.

Income Tax Filing Online

2009-01-15T23:46:00.000-08:00

If you've never filed your Federal and state income taxes online, you have probably waited too long for your refund and/or missed the opportunity to be certain that you have taken advantage of every available reduction in the amount of taxes you have to pay. That said, I know this firsthand because I've done my own taxes online for the last three years. The results have been very beneficial to me and my family.

First of all, it is a very inexpensive way to get the best information possible about reducing your tax payment. Online Tax Filling can cost you as little as half of what it would cost to go to a tax preparer. In addition, online tax filing programs walk you through the process step-by-step so that you don't miss any opportunities to save money. Last, but not least, you will get your refund check much faster if you do your filing online.

Concerned About Privacy?

Your personal financial information is as private when you file online as it would be if you go to a tax preparer or do it yourself at home and then mail it. Most online tax filing companies offer you details about how they protect your privacy, even to the extent of offering to replace ANY funds taken from your tax account while you are using their service. This means that they will accept liability even if a hacker accesses your account!

Be sure to look for a company that offers this level of security or more. No one can totally guarantee that any transaction you make on the Internet will be completely private. If a company is so committed to serving you that they will replace any funds that are affected, you can pretty much count on them carefully monitoring and working to keep their site as secure as possible.

Worried You Won't Be Able to Do It Right

If you've done your own taxes on paper and know a little about following directions, you will find that it is easier to do your taxes online. As I said above, you will be guided through each step with both questions, options, and detailed instructions. As you make your entries, some companies even question data that looks like it might be unusual. When you finish the process, you will be able to have the company review it for correctness a second time.

The program will do ALL of the math for you, too. This means that there won't be any errors in the dollar amounts you enter. I've found that this is very helpful because when I did my taxes on paper, I always had to recheck the math two or three times before I felt comfortable with it.

Wondering What You Have to Do?

Getting all the information together is always the hardest part for most of us. If you've kept all your bills and information together, however, you will be pleased to discover that online tax programs will tell you exactly what you need to have in front of you when you begin the process. You don't have to rush either. If you are moving along through the process and have to stop, you can come back later to continue.

Basically, what you have to do to make online tax filing work for you is to gather your tax information. Have your W2s handy and any tax documents you have received from work, from your bank, from your student loan company, and from any other source that has provided you with information about what you have paid in taxes. Gather your medical receipts, household improvement expenses, and, if you are an independent contractor, gather information about the cost of doing business. You will also need a credit card or checking account number when it comes time to pay for the tax service.

The Good News

If you've followed the instructions carefully, you will find that the process is fairly simple to complete. Once you've used an online tax preparation program, you will have established an account with them that you will be able to access again the following year. That means saving even more time the second time around. You should know that your refund can be direct deposited into your bank account and that it will most likely be deposited within a few days rather than a few weeks!

You don't need to be concerned about how to sign your tax forms. While you will have the choice to print them out and mail them (which may be advantageous in some circumstances), you will get your refund much faster if you use an electronic signature. In some cases, that signature is based on a very specific question about a line from your tax return from the previous year. If you know the correct amount from that line, the IRS will accept the information as evidence that you are the right person submitting the return.

I have had a lot of success and saved time and money by filing my own taxes online, and I wanted to share information about this option with you. One final note: some sites allow you to go all the w ay through the process before you make your payment. This gives you the opportunity to decide how happy you are with what they offer. I strongly recommend that you give online filing a try. It just makes sense.

Alternative Minimum Tax (AMT) How It Affects Filing Season 2009

2008-03-25T23:19:00.000-07:00

Every year taxpayers need to consider whether they will have to pay the Alternative Minimum Tax (AMT). The AMT Assistant is intended to provide a simple test for taxpayers who fill out their tax returns without using software to determine whether they may be subject to the AMT.

The AMT Assistant is an electronic version of the AMT Worksheet in the 1040 Instructions, called the Worksheet to See if You Should Fill in Form 6251 - Line 45.

Using the AMT AssistantThe AMT Assistant is easy to use. You just answer a few simple questions about entries on your draft 1040 and the system does the rest. You will see the results immediately on your computer screen. Based on your entries, the results will tell you that either you do not owe the AMT or that you must go further and complete Form 6251 to find out if you owe the AMT.

Your entries are anonymous and the information will be used only for the purpose of determining your eligibility. All entries are erased when you exit or start over. See the IRS Privacy Policy for more information.

Income Tax Return Filing Preparations

2008-03-05T02:13:00.000-08:00

With a little bit of planning, you could find filing tax returns to be a simple task. First of all, keep documents like your SSN, your spouse's SSN, and dependent's SSN in order. Get together medical expense records, charitable contribution records, accounting records of your business, wages and asset purchase records.

Make sure you have gathered the interest income (Form 1099 INT), dividend income (Form 1099-DIV), sale of stocks and bonds (Form 1099-B), mortgage interest (Form 1098) and IRA/ Pension Distribution (Form 1099-R, Form SSA 1099).

Some of the other important documents are Form 1099G, Form W -2G, Form 1099-MISC, Form-1099MSA, and Form-1098 E.

Keep a record of the mileage on your vehicle, Internal Revenue contribution, job travel, wages and taxation of household employees. Home property details, such as total area, home office area, expenses records, rent paid and theft from property are also important details. Along with this you should also have scholarship and bank statement records.

To qualify as head of the household, your filing status for the year has to be either "married filing separately," or "married filing jointly." As an unmarried dependent, you must file a tax return if your earned and/or unearned income exceeds certain limits. There are many specific rules for couples who are divorced, separated or living together. It would be a good idea to go through the rules and become clear about them.

Dependents are divided into two categories: qualifying relative and qualifying childv which means your child, as well a relative you are supporting can be claimed as dependents. They must have passed the tests of citizenship or residents, joint return test, gross income and support.

A person claimed as a dependent cannot claim any other dependents during the same calendar year. There is no age limit as long they have passed the above tests. Inspect the rules for dual income, separated or divorced couples. Do keep in mind that the social security number of the dependent has to put on the return and child support payments are not deductible.

Electronic filing has made the filing of tax returns easier. To use the e-file program, you must first choose the authorized IRS e-file alternatives that are best for you. The authorized IRS e-file provider could be an electronic return originator, intermediate service provider, transmitter or software developer.

Publication 1345 (PDF), which is the Handbook for Authorized IRS E-File Providers Individual Income Tax Returns, helps you take part in the e-file program. Technical information is in Publication 1346 (PDF), Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns. Get constant updates to this publication on the Electronic Filing System Bulletin Board.

Extension Filers Can Still e-file Tax Returns

2008-02-18T22:19:00.000-08:00

Enjoy the most comprehensive, easy and convenient e-file tax extension system available on the web and avoid large tax penalties by filing your tax extension to IRS. 96% or our tax extension clients are accepted by IRS and out of them 92% are accepted on their first attempt. Experience the difference with efile Tax Extension.

Around 10 million U.S. Taxpayers have filed their federal tax returns extension this year according to the IRS. Oct 16 is the new April 15 for those tax payers. Preparing your taxes in the off season may poses some special challenges but with Efile Tax Extension you can do so with ease of comfort.File your federal and state tax extensions online. Don't take chances with your tax extension - e-file with the trusted tax extension leader since 1997. The last date of filing tax extension is 15 April, 2009.

When you are filing tax return extension it's very important that you have all the necessary information. At times, if you have not received necessary documents needed to complete your tax return or you may just find yourself short of time to file accurate return, OR if you can not file your tax return on time : Simply file tax extension by the due date of your return. Fill Form 4868 and send it to Internal Revenue Services (IRS) office with which you file your return.

So many individual and small business online tax filers struggle to meet the income tax deadline. We offer easy, online IRS tax extensions for those who need more time to finish their income taxes. In about 5 minutes, you can get up to 6 more months to finish your taxes and the IRS doesn't even ask why - it's automatic! Say goodbye to the April 15 tax deadline. We provides both Personal and Business Income Tax Extensions.

So Start Now - And Get rid of Tax Filing Deadline. Get 6 more months to finish your taxes with FileLater - it's easy!

Tax Filing Season Opens with Debut of 1040 Central

2008-02-01T06:05:00.000-08:00

Taxpayers pondering a question, taxpayers searching for a form or taxpayers looking for their refund now can go to just one place: 1040 Central at IRS.gov.

The Internal Revenue Service today kicked off a new tax year by alerting taxpayers that 1040 Central and other enhanced electronic services should make the agency's Web site an even easier-to-use source of information. Tens of millions of Americans begin receiving their tax packages for the 2004 tax season this week.

At IRS.gov, taxpayers will find information on 1040 Central about lower tax rates, larger child tax credits and the elimination of the "marriage penalty." There are new income limits for Earned Income Tax Credit recipients. Investors will find new rates on capital gains and dividends and a revised Schedule D. Taxpayers also should review the Advance Child Tax Credit information to avoid an error on their return that could slow their refund.

This week, 28 million veteran electronic tax filers will receive postcards and 34 million paper filers will receive the Form 1040 booklets as the 2004 filing season gets underway. The IRS expects to process 131 million individual tax returns this year, approximately the same as last year. This year, more than 53 million taxpayers will opt for the easier and faster IRS e-file, which also is the quickest route to a refund.

IRS Commissioner Mark W. Everson unveiled the new 1040 Central feature on IRS.gov that is designed specifically for the individual taxpayers and for the tax professionals helping them. The new page pulls together much of the step-by-step information taxpayers need to prepare and file a return — and check on refunds.

"At 1040 Central, taxpayers will find virtually everything they need for their 2003 tax return. The 1040 Central page can be a one stop location for help," Everson said. "The 1040 Central section reflects our effort to make IRS.gov the easiest, fastest and best option for taxpayers. You don't have to come to us; we are available to you electronically 24 hours a day, seven days a week."

At 1040 Central, individuals will find:

What's New This Year, which highlights the latest tax law changes, tax tips, news releases and frequently asked questions;
Get Ready to File, which provides links to information about the Earned Income Tax Credit, the 2003 Advance Child Tax Credit and commonly used forms and tax instructions;
File Your Return, which provides links to IRS e-file and Free File, the free service provided by IRS partners in the tax software preparation industry;
After You File, which includes the interactive Where's My Refund? that allows taxpayers to track the status of their refund;
More Assistance, which helps taxpayers locate additional information sources.

The 1040 Central page also can help taxpayers avoid errors when it comes to the Advance Child Tax Credit that 20 million families received last year. The child tax credit increased to $1,000 from $600. Taxpayers must reduce their 2003 claimed credit by the amount of the advance payment check they received last year. The amount of the advance payment was shown on Notice 1319 mailed to eligible taxpayers last year, and taxpayers also can check the amount of their Advance Child Tax Credit at 1040 Central.

At 1040 Central, taxpayers also will find easy access to IRS e-file information, including lists of e-filing tax practitioners by zip code, and access to IRS Free File, the partnership with private-sector tax preparation software manufacturers. The IRS will provide additional information about Free File later this month. More than 2 million taxpayers used Free File's free services last year, its first year of operation.

Taxpayers who use IRS e-file have a higher satisfaction rating than those who still use paper returns, according to the American Customer Survey Index, which rates private and public sector service industries. Filing electronically remains the fastest, easiest route to a quick refund. When used with direct deposit, e-file means a refund in about two weeks or even less.

Millions of Americans have lower tax rates this year. For 2003, the tax law changes include:

Expanded 10 percent and 15 percent income tax brackets.
Lowered tax rates to 25 percent, 28 percent, 33 percent and 35 percent.
Increased standard deduction to $4,750 for single taxpayers, $7,000 for head of household and $9,500 for couples filing as married filing jointly.
Increased Child Tax Credit to $1,000 per qualified child from $600.
Tax relief for military families.
The increase in the standard deduction for couples whose filing status is married filing jointly eliminates the so-called "marriage penalty." The changes in tax rates will automatically be reflected in the tax rate tables. The IRS also urges military families to review tax law changes. Some changes will require military families to file amended returns to fully claim some retroactive tax relief.

More taxpayers may qualify for the Earned Income Tax Credit. The new limits for earned income or adjusted gross income are less than $33,692 with more than one qualifying child, less than $29,666 with one qualifying child and less than $11,230 with no qualifying child. All EITC income limits are $1,000 higher if taxpayers file as married filing jointly. However, taxpayers should carefully review EITC eligibility requirements to determine if they meet all the participation rules.

Taxpayers with investment income will have a new Schedule D to use as new rates take affect for capital gains. For gains after May 5, 2003, the 10 percent rate is reduced to 5 percent and the 20 percent rate is reduced to 15 percent. Dividends paid after Dec. 31, 2002, will be taxed at the new capital gains rate.

And, the IRS reminds taxpayers that the tax filing season also brings out unscrupulous promoters touting various scams and schemes. Remember, if it sounds too good to be

Source:IRS.Gov

Does Filing Taxes Tax Your Brain As Well As Your Wallet?

2008-01-12T21:07:00.000-08:00

If you are excited at the prospect of doing your taxes, you are one of the few lucky ones. For most of us mere mortals, our taxes are an incredibly intimidating and complex beast.

Needless to say, the U.S. tax code does not make for a light read. Nonetheless, you are still obliged to file and pay your taxes, no matter how daunting the task may be. Fortunately, help may just be a phone call away.

This article will discuss various methods you can use to make filing your taxes as stress-free as possible.

Using professional tax preparation tools (people and software)

What is the most important benefit to having a tax professional prepare your tax return? Not having to prepare your tax return yourself.

It is as simple as that; preparing and filing your own tax return will take up a lot of your valuable time, and could end up causing you a huge amount of stress and annoyance in your life. And no matter what, it is bound to be a perplexing and confusing process. Using a tax professional will take away most of your tax related stress (but not all of the stress, unfortunately you will still have to wait for your tax bill).

You will also have the added benefit of knowing that will be able to rest easy with the knowledge that someone who actually understands the U.S. tax code is preparing your taxes. This is especially important if your tax situations is particularly complex, or if you want to plan an aggressive tax strategy as part of a larger financial plan.

What professional solution is right for you?

You have two main professional solution choices: people or software. If your tax situation is especially complex, or if you are a small business owner, than you should consider getting either an Enrolled Agent (EA) or a Certified Public Accountant (CPA) to prepare your income taxes.

The advantage of using either of these professionals is that you will avail yourself of the services of someone who has been certified to prepare people's taxes, by either the state for CPAs or the IRS for EAs. This is important if you have a complex tax situation and you need to know that it is being handled properly.

If you just cannot take any risks, then hiring a professional is the way to go. If you face a more straightforward tax situation, you could probably get by using one of the many walk in services that fill the airways with advertising come tax time. As a final alternative, if you are more confident in your skills you should considering using tax filing software to finish your taxes off yourself.

With most software, it will just involve answering a series of questions; you will not just be left with an electronic version of the long form to fill out from scratch! And if your adjusted gross income is $52,000 or less, you will be able to find a software package to file your taxes for free under the government's Free File program.

In the end, no matter what option you select, just be sure to plan ahead and file on time!

Ways Helps to In Filing Your Tax Return Smoothly

2008-01-12T01:26:00.000-08:00

With the ever changing tax laws, which are difficult to understand, we have put together 9 helpful hints to help you to be better organized and make your tax filing run more smoothly.

1. Don't procrastinate:

You will want to gather your information and began reviewing it as soon as possible. Also, by reviewing last year’s return for changes in things such as; deductions, dependant's status, and income. In doing this step it will refresh your memory, so that important deduction are not forgotten on this year’s return.

2. Gathering your deductions:

You want to review your current year's expenses and gather anything you might consider to be a deduction. Also, going through your checkbook, credit card statements, and receipts will help you better locate those all important deductions. Let’s face it the more deductions you have the better. Here are some examples of expenses to look for that you may have: Medical expenses, Mortgage interest, Real estate taxes, donations, work related expenses, union dues, personal property taxes and any other items that you think might be deductible.

3. Income Documentation:

Gather all the income documents you have received during the year such as: Form W-2 (Statement of Wages), Form W-2 F (Gambling winnings), Form 1099-B ( Stocks and Bonds), Form 1099-R (Distributions from pensions, Annuities, Retirement or profit-sharing plans, IRAs, and Insurance contracts), Form 1099 (Interest, dividends, royalties), Form 1099-G ( State and Local income tax refunds), Form 1099-B and Brokerage statements (Sales of securities), and K-1s (Income and Deductions from Partnerships, S Corporations, Trusts, Estates). Review all these documents to make sure they are correct. If you notice any discrepancies contact the issuer of the form immediately to get a correct form. If you are unable to get the correction made you will be required to attach a letter of explanation with your return.

4. Non Taxable Income:

When gathering your above income information do not forget your non taxable income. Here are a few examples of these: Child Support payments, Welfare benefits, Life Insurance proceeds received due to the death of an individual.

5. Personal information:

You will need to gather some personal information that will be required to file your return such as; security numbers and birth dates for any dependents you will be claiming.

6. Children's income:

While gathering your information to file your tax return, take a moment to review this information for your children to see if they have any filing requirements.

7. Scheduling your appointment:

You will want to schedule your appointment with your tax preparer as soon as possible to allow ample time for any corrections or documents you will need to track down before the filing deadline and to avoid the last minute rush of filers.

8. Making tax payments:

When making payments to the IRS you will want to make sure that your payment is properly identified with the following information: Your name, Address, Social Security Number or your business ID number. Also, include what the payment is for including what tax year. Make individual payments; do not combine more than one payment in the same check.

9. Keeping records:

It is recommended that should keep your records including bank statements, canceled checks, income and deductions for at least 3 years from the date of filing your return. That is the statute of limitation set by the IRS for audits. By doing so that will help you be better prepared in the event that your return is selected for an audit.

2008 Tax Filing - Helpful News About Taxes.

2008-01-07T01:19:00.000-08:00

The Tax Save 2008 Open Enrollment period beqins on October 1, 2007 and ends on October 31, 2007. TaxSave Opero Enrollment is y'our opportunity to save tax dollars in the 2008 tax year with the Premium Option Plan and the two Flexible Spending Accounts (FSAs) - the Unreimbursed Medical Spending Account and the Dependent Care Spending Account

Enrollment in the Premiun Option Plan component of TaxSave is automatic every year. The Flexible Spending Accounts require active enrollment each year. There are a variety ot easy ways to enroll.
You may enroll over the phone by calling Horizon BCBSNJ's automated voice response system at 1-800-2244426 (October 1 - October 31, 2007).
You may enroll overthe Internet during the same time period at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the link to the Horizon BCBSNJ Web site.
You ean enroll by obtaining an enrollment kit from your benetits administrator. These forms must ba postmarked by October 31 , 2007, in order to enroll for the 2008 plan year.

TaxSave and Domestic Partners and Dependents Age 23 to 30

State employees are able to add a same-sex domestic partner to their SHBP medical and dental insurance coverage, and New for the 2008 plan year, Chapter 375, PL 2005, permits continued SHBP medical plan coverage for certain dependents unti! their 30th birthday

However, before any premiums that the employee pays for the domestic partner or over-age dependent coverage can be made on a pre-tax basis under the Turbo Tax Save Premium Option Plan, the domestic partner or over-age dependent must be able to qualify as a "tax dependenf' of the employee for federal tax filing purposes - under Internal Revenue Code Section 152.

Similarly, the domestic partner or over-age dependent must qualify as the employee's tax dependent before an out-ofpocket medical expense incurred by the domestic partner or dependent can be reimbursed under the Unreimbursed Medlcal Spendlng Account. See IRS Tax Topie 354 - Dependentsfor addjtional information on the requirements for establishjng dependent status for federal tax purposes.

If the domestic partner or over-age dependent is not a "qualified tax dependent" of the employee, any premium deductions made for the domestic partner's coverage must be made on an after-tax basjs and funds in the Unreimbursed Medical Spending Account cannot be used to cover the domestic partner's medical expenses

The big news about Intuit's TurboTax line this year is the development of specialized versions. In addition to Basic, Deluxe, Premier, and Home & Business, there are now versions for serious investors, retirement planners, and Spanish speakers. All of these programs' features (minus the Spanish version, which is most similar to Basic) appear in Turbo Tax Premier ($59.95 list), which we review here.

A new feature called My Tax History brings more data in from your previous year's return to help save you time (though you still need to review it for accuracy). In the interview mode, you can select a split screen, with the current form showing below. Questions and explanations appear in the main interview window, with fields or check boxes for your responses. FAQs appear in the right pane, and your current tax score (amount of refund or obligation) appears above.

Income Tax Filing Guide

2008-01-03T03:12:00.000-08:00

The month of January rolls around and most of America is getting ready to prepare their income tax filing. Every year everyone who made an income are required to report income to the federal and state governments by income tax filing. Taxpayers must file two separate income tax returns. One income tax return goes to the federal government and the other goes to the state government that the taxpayer lives in. Most of taxpaying Americans are able to fill out a Form 1040A: U.S. Individual Income Tax Return. People that do not have any children or qualified dependents are able to file a federal 1040EZ form. This form is also known as the Income Tax Return for Single and Joint Filers With No Dependents. The 1040EZ is basically a shorter version of the 1040A form; however, taxpayers must meet certain requirements before filing a 1040EZ form.

IRS e-file is fast becoming extremely popular with taxpayers as well. Find everything electronic in one place at irs.gov. This includes tax filing information, how to pay electronically, and more. According to the website of the Internal Revenue Service (IRS) which is found at irs.gov. Seventy percent of the nation's taxpayers are eligible for free tax preparation software and free electronic filing. See if you are eligible, by visiting their site. Most of taxpayers will have the income tax forms they need mailed to their home address. This option, to have federal income tax forms mailed to a taxpayer is given on the previous year’s tax forms. People who do not wish to receive federal income tax forms but do need them can get the forms from a number of sources. Many paper forms are available for pickup at many local post offices, banks, and libraries. Taxpayers can also visit the website of the Internal Revenue Service (IRS) which is found at irs.gov. The Internal Revenue Service has a collection of federal income tax forms that can be downloaded and printed at their web-site.
In some states a taxpayer reports their income earned to their state government. They will also have to fill out a separate state tax return form. Each state has their own income tax return forms, and Laws. The form numbers will all be different because they vary from state to state; however, some forms will have the same heading. It is not uncommon for a state income tax form to be known as the Resident Income Tax Return. As with federal income tax returns, the majority of states have a long income tax return form and a short one. Taxpayers who are able to fill out and file a short state income tax return are encouraged to do so because it saves many taxpayers a large amount of tax preparation time. As with most federal income tax forms, state tax return individuals are likely to have a packet of state income tax forms mailed directly to their home. It is also possible for taxpayers to find their state tax forms at their local post office, financial institution, or library. Check your own State Laws for the details.
In addition to the regular taxpaying individual, there are several others who have to report and possibly pay an income tax. All businesses and estate properties of an individual who has passed on are subject to an income tax. A small business owner or the executor of an estate property will have to file different federal and state income tax forms than the traditional taxpayer. These forms can be obtained at the same places where standard federal and state forms are available.

IRS e-file: Secure Online Tax Filing

2008-01-02T04:39:00.000-08:00

The IRS e-file system has never had a security breach. In fact, over 400 million returns have been electronically filed since 1986 without a security incident.

FACTS

The IRS e-file System is not done over e-mail
The IRS e-file System has many built-in security features
The IRS e-file System employs multiple firewalls
The IRS e-file System uses state of the art virus and worm detection
The IRS e-file System meets or exceeds all government security standards
The IRS e-file System is constantly tested for weaknesses by penetration testing
The IRS e-file System has never had a security breach
All Internet transmissions will use SSL (Secure Sockets Layer) encrypted security measures.

IRS e-file transmissions are very secure because the IRS has been extremely diligent in the design, development, analysis and testing of the current infrastructure and system. IRS e-file meets or exceeds all government security standards and includes multiple firewalls.

Most e-filed online tax returns are transmitted over phone lines from the return preparer to a third-party transmitter. From there, the returns are forwarded over secured lines to the IRS. Intercepting telephone transmissions is quite difficult and requires access to phone company major transmission lines. Also, to transmit data like tax returns over telecommunications lines means that the information gets converted into digital format which could not be easily read even if it were intercepted.

Source: irs.gov

Online Tax Filing: Why File Taxes Online?

2007-12-27T19:39:00.000-08:00

Online tax filing provides an easy, hassle-free way of filing your taxes. Even if you’ve never filed taxes before, online tax filing will get you through the process, quickly and affordably.

Why file taxes online?
There is little reason to file your taxes the traditional way ever again! With online tax filing, you are guided step by step to ensure that your tax returns are accurate. Help is always available at the click of a button through an interactive system built directly into the program. Because everything is outlined for you, you’ll only need your W2s, 1099s, and other documents to complete your taxes.

Online tax filing makes your life easier. It works with the IRS system, eFile, which electronically files your tax returns. There is no need to worry about missed deadlines because you won’t have to send them by mail. At the end, you only need to click a button to send your tax returns. You can also print out a copy for your records.

With online tax filing, you won’t have to pay a tax accountant’s professional fees to get your taxes filed. Online tax filing is as low as $20, which saves you money. Because online tax filing systems are designed to catch errors, you don’t have to worry about your information being wrong. Also, online tax filing offers deductions tools so you can accurately enter your deductions and maximize your tax refund.

You can also opt to receive your tax refund check via direct deposit. With online tax filing, all you have to do is enter your bank account and routing numbers to request a direct deposit. The best part is that you’ll receive your refund check in half the time. Plus, you can skip the line at the bank and the time it takes for the check to clear.

What do I need to file my taxes online?

Just gather your W2’s, 1099s, receipts, and other necessary documents. All the information you need is contained within these documents. Online tax filing systems will guide you through the documents. Online tax filing allows you to look in the correct area and fill in the number on the online form. You won’t have to worry about reading the wrong box or entering the wrong number. Everything is outlined so you can quickly and easily file your taxes.

Online tax filing programs come equipped with a deduction finder. This ensures that you have fully taken advantage of every available deduction. Just answer yes or no questions and the online tax filing program will guide you to the right deductions. With a system so accurate, there is no need to worry about missed deductions.

The Bottom Line

Online tax filing is the easiest way to file your taxes and offers the best way to pay your taxes and receive your refund check. If you want a hassle-free, easy way to file your taxes, give online tax filing programs a try.

Source : IRS.Gov

Individual e-file Electronic Tax Filing Program Overview

2007-12-20T02:58:00.000-08:00

How to e-file your taxes online? It's as easy as 1-2-3 !

Step 1 - Get all your tax information together! - You'll save time and won't have to stop in the middle of preparing your current year tax return to find a missing document. Here's what you'll need :

Social Security numbers for yourself, your spouse, and any dependents.
Forms W-2 from all employers are required for yourself and your spouse.
Forms 1099 for Dividends, Retirement, or other income, or any Forms 1099 with Income Tax Withholding.
Receipts for expenses for Itemized Deductions (Schedule A).
Receipts and records for other income or expenses.
Bank Account numbers (for a fast refund, or to pay electronically).
Prior year Adjusted Gross Income amount or prior year PIN if using a Self-Select PIN as your signature.
Complete information on what records you need, and how long to keep your records.

Step 2 - Choose the method of e-filing that works for you:

Tax Professional
Personal Computer
Free File

Step 3 - e-file it!
Paid Preparer - If using a Tax Preparer, be sure to take all your information with you, and don't forget to ask for IRS e-file! Use our locater service to find an Authorized IRS e-file Provider nearest you.

Personal Computer - Those filing taxes online, just answer the simple questions in your tax preparation software, and the software will do the rest for you. For faster refunds, or to pay when YOU want to, have your bank account number handy.

Source: IRS.Gov

Another Record-Breaking Number of Taxpayers Choose to Electronically File in 2007

2007-12-16T21:57:00.000-08:00

WASHINGTON - The Internal Revenue Service this year received nearly 80 million tax returns through e-file, breaking the record set last year.

The 2007 level is up about 9 percent from the 73 million returns filed for the same period last year. Of the 139.3 million returns filed in 2007, 79.98 million or about 57.4 percent were filed electronically.

"It was another record-breaking year for e-file," said IRS Acting Commissioner Linda E. Stiff. "Paper returns continue to drop year after year. E-file is the safe, accurate way for more and more taxpayers to quickly complete their taxes and get a refund faster."

Since 2001, the number of e-filed returns hasalmost doubled and over the past decade the number of e-filers has increased four-fold.

Year	Returns	Total E-file	Percent E-file
1997	121.5 million	19.2 million	15.8%
1998	123.8 million	24.6 million	19.9%
1999	125.9 million	29.3 million	23.3%
2000	128.4 million	35.4 million	27.6%
2001	131.0 million	40.2 million	30.7%
2002	131.7 million	46.9 million	35.6%
2003	131.6 million	52.9 million	40.2%
2004	132.2 million	61.5 million	46.5%
2005	134.0 million	68.5 million	51.1%
2006	136.1 million	73.3 million	53.8%

More than 22.6 million returns have been e-filed by taxpayers doing their own returns, up from 20.3 million from the same period last year. More than 57.4 million returns were e-filed by tax professionals, up from nearly 52.9 million last year.

Direct Deposit, IRS.gov also Set Records

Meanwhile, more people this year chose to have their tax refunds directly deposited than ever before. For the year to date, the IRS has directly deposited 61.4 million refunds, up 8 percent from last year.

The IRS Web site - IRS.gov - also experienced a record year. The IRS recorded 196.2 million visits to IRS.gov this year, a more than 10 percent increase from the 177.5 million visits for the same period last year.

Free On-Line Electronic Tax Filing Agreement

2007-12-14T22:07:00.000-08:00

The IRS will have the Consortium web page ready by December 31, 2002. Consortium participants will have submitted their test returns produced by their software to the IRS sufficiently in advance of that date for testing. The IRS will not list on the Consortium web page a Consortium participant whose test returns have not been certified prior to the beginning of the filing season until that participant's test returns have been tested and certified.

The Consortium will use its best efforts to assure that Free Services by individual Consortium Participants are performed in accordance with the terms of the Agreement and in accordance with the offer made by the Consortium Participant. If the IRS determines a particular offering of Free Services is deficient or that Free Services are not being properly performed, it will notify the Consortium in writing of that fact, and provide information regarding corrective actions it believes are needed.

The undertaking by the Consortium under IV. A to offer Free Services at or above the 60% level shall apply only to January through April of each year (the primary tax filing season). Outside of the primary tax filing season, the Consortium shall encourage Consortium members to offer Free Services to the same extent that such services are offered by Consortium members for compensation.

The Consortium will be responsible for establishing its governance standards. These standards shall be in accord with applicable law and regulations. The standards shall be consistent with the Consortium performing its obligations under this Agreement and be designed to maximize participation of industry members while meeting the requirements of the Agreement.

IRS, in consultation with the Consortium, will develop an assessment process including usability performance measures to measure the extent to which the Agreement is accomplishing the objectives described in I., above. They will include at least:

Uptime and reliability through the tax season.
Delivery of the taxpayer to the Free Services in the minimum number of clicks consistent with usability design principles and the need to fully inform taxpayers about the free online services. From the site the taxpayer arrives at by clicking on the Consortium page's link to the Consortium Participant, until the taxpayer arrives at the Free Services, there will be no more clicks than required of such Consortium Participant's paying customers, if applicable, consistent with usability design principles.

source:irs.gov

Tax e-filing Options for Individuals.

2007-12-13T22:03:00.000-08:00

Choose the method of e-filing that works for you.

Tax Professional
If you choose a tax professional to prepare your return, be sure to ask for IRS e-file. When your preparer electronically files your income tax return, you don't have to worry if the mail gets through. And, IRS e-file is so accurate that you are 99% less likely to receive subsequent correspondence from the IRS. e-file delivers a fast refund, in as little as 10 days with Direct Deposit. Keep in mind there may be fees associated with tax preparation. In addition, some tax preparers may charge a fee to provide IRS e-file.

More than 57 million returns were e-filed by tax professionals during 2007. To find a tax professional that offers IRS e-file in your area, use our Authorized IRS e-file Provider Locator Service or check our e-file Provider page.

Personal Computer
A computer with a modem or Internet access and tax preparation software are all you need to DIY (do-it-yourself). Best of all, you can e-file from the comfort of your home 24 hours a day, 7 days a week. In 2007, over 22 million returns were e-filed from home computers. For more information on using a personal computer and a list of IRS-tested and -approved software companies, see e-file Using a Computer.

Free File
Are you interested in preparing and e-filing your federal income tax return for free? Millions of taxpayers are eligible to use Free File. To see if you are eligible and to learn more about these free online company services, please visit our Free File page. Commercial tax software companies provide these online Free File services.

Source: irs.gov

2007 Filing Season Kicks Off with New Features, Extended Tax Breaks; Tax Forms in Mail This Week

2007-12-11T02:09:00.000-08:00

WASHINGTON - The Internal Revenue Service today began a busy 2007 filing season that features telephone excise tax refunds, a new refund deposit feature and recently enacted tax breaks that may require extra attention from taxpayers.

"Taxpayers will have a number of new tax benefits and features available this year," IRS Commissioner Mark W. Everson said. "We encourage taxpayers to take a few minutes to review these changes, particularly those involving the recently enacted tax law provisions. The IRS will do everything it can to minimize the impact on taxpayers."

This week, the agency is sending 17 million 1040 tax packages for 2006 to taxpayers who have previously filed paper returns. The number of paper tax booklets being mailed to Americans continues to decline as more people opt for electronic filing. The IRS expects to process about 136 million individual tax returns for 2006, with more than half of those filed electronically.

Among the major changes taking place this year:

Telephone Excise Tax Refund. Individual taxpayers will be able to request a refund if they paid the federal excise tax on long-distance or bundled service. The government stopped collecting the federal excise tax on long-distance service in August and announced plans to provide refunds of these taxes billed after Feb. 28, 2003, and before Aug. 1, 2006. More than 146 million individual taxpayers are expected to request the refund.

To request the refunds, taxpayers have several options:

Individual taxpayers can request the refund by using the standard amounts, which are based on the total number of exemptions claimed on the 2006 federal income tax return. Choosing the standard amount saves taxpayers the time and trouble of digging through 41 months of old phone bills. The standard amounts are $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four or more exemptions. For example, a married couple filing a joint return with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60. To get the standard amount, eligible individual taxpayers will fill out an additional line on their regular 2006 1040 return. (Line 71 on Form 1040; Line 42 on Form 1040A; Line 9 on Form 1040EZ.)

Alternatively, individual taxpayers who want to request a refund of the actual amount of tax paid should figure that amount using Form 8913 and report it on their income tax return.

Businesses and tax-exempt organizations can also request a refund under a different procedure; more information is available at IRS.gov.

New 1040EZ-T Form. For people who don't need to file a regular tax return, the IRS has developed a special, shorter form to allow them to request the telephone refund. Copies of the Form 1040EZ-T will be available on IRS.gov, over the phone and at a variety of other locations. The IRS encourages people who qualify for the 1040EZ-T to file electronically through the Free File program, which will be available for free beginning later this month. More than 10 million taxpayers who aren't normally required to file a tax return may be able to use this new form. Taxpayers can either request the standard amount on this form or attach a Form 8913 to request actual amounts.

Recent Tax Law Enactments. The IRS is taking a number of steps to help taxpayers get the information they need to take advantage of tax law provisions enacted in December after IRS forms went to print.

This new legislation affects a number of areas of tax law, but the most significant effect on individual taxpayers involves the deductions for state and local sales tax, higher education tuition and fees, and educator expenses.

Taxpayers can visit IRS.gov for updated information on the late legislation. The IRS will conduct a special mailing of Publication 600, which will include the state and local sales tax tables and instructions for claiming the sales tax deduction on Schedule A (Form 1040), to 6 million taxpayers who also receive the 2006 Form 1040 package this month.

For taxpayers using a paper Form 1040, they will have to follow special instructions if they are claiming any of the three deductions. The key paper 1040 Forms went to print in November, so taxpayers will have to make special notations to claim the deductions if they use these paper forms. Specific details are available on IRS.gov. For people using IRS e-file or Free File, tax software will be updated to include the three key tax provisions, and e-file will get the refunds to taxpayers faster than paper returns.

"As we always do, we encourage taxpayers who think they may claim these deductions to file electronically," Everson said. "They will get their refunds faster through e-file. Even more importantly, e-file will greatly reduce the chances for making an error compared to claiming the deductions on the paper 1040."

The IRS will not be able to process tax returns claiming any extender-related deductions until early February. All other returns can be filed and processed as normal. Whether claiming an extender provision or not, the IRS notes that using IRS e-file is the most accurate way to file any return and the quickest way for taxpayers to receive their refunds. Based on filings last year, only about 930,000 tax returns claimed any of the three extender provisions by Feb. 1.

New Split Refund Option. For the first time, taxpayers can split their refunds among up to three accounts held by up to three different U.S.financial institutions, such as banks, mutual funds, brokerage firms or credit unions. To split their direct-deposit refunds among two or three different accounts or financial institutions, taxpayers should complete the new Form 8888, Direct Deposit of Refund to More Than One Account. Taxpayers can also continue to use the direct deposit line on the Forms 1040 to electronically send their refunds to one account.

Free File Improvements. The free electronic filing program begins later this month featuring improvements to benefit the 95 million taxpayers - 70 percent of all taxpayers - who qualify for the program. Free File, a partnership between the IRS and the private sector Free File Alliance, is available for taxpayers who earn $52,000 or less. This year, the program features an agreement by private sector partners to remove Refund Anticipation Loans (RALs) as well as other ancillary offerings from the program.

Given the large number of changes this year, there are several easy options for taxpayers to turn to for help. IRS.gov will have information on all the tax changes and new features this year. Key features include:

1040 Central. This is a one-stop online shop for people hunting key forms, looking for what's new in the tax code and answers to frequently asked questions.

Where's My Refund? Once taxpayers file their tax return, they can track their refund through the online tool "Where's My Refund?" at IRS.gov. Taxpayers will need some of the exact information from their tax return in order to use the tool. Access this secure Web site to find out if the IRS has processed the tax return and sent the refund.

Filing electronically will prevent problems for many taxpayers sorting through this year's changes. With IRS e-file, taxpayers can get their refunds in half the time of filing a paper tax return and receiving a refund check, even faster with direct deposit. IRS computers also quickly and automatically check for errors or other missing information, making e-filed returns more accurate and reducing the chance of getting an error letter from the IRS.

"With all the changes taking place, this is a good year for paper filers to try e-file," Everson said. "We remind taxpayers that e-filing is fast, secure and reliable."

Taxpayers consistently give high marks to e-file in satisfaction surveys. E-file ranks as one of the government's most popular programs, according to the American Customer Satisfaction Index. And in a survey of users of Free File, 97 percent said they would recommend it to others.

source : irs.gov

Online Tax Filing for FREE

Tax Seasons has Started, Its now time for E-filing your tax return

The Five Filing Status Possibilities.

Top 5 Questions Regarding E-Filing A Tax Return.

Electronic Tax Filing with Best Tax Filing

Online Income Tax Filing Tips

Top Four Tax Filing Mistakes

How Will You File Your Taxes?

Why Will You Submit Your Taxes Electronically?

Online Tax Filing: Why File Taxes Online?

Income Tax Filing Online

Alternative Minimum Tax (AMT) How It Affects Filing Season 2009

Income Tax Return Filing Preparations

Extension Filers Can Still e-file Tax Returns

Tax Filing Season Opens with Debut of 1040 Central

Does Filing Taxes Tax Your Brain As Well As Your Wallet?

Ways Helps to In Filing Your Tax Return Smoothly

2008 Tax Filing - Helpful News About Taxes.

Income Tax Filing Guide

IRS e-file: Secure Online Tax Filing

The IRS e-file system has never had a security breach. In fact, over 400 million returns have been electronically filed since 1986 without a security incident.

Online Tax Filing: Why File Taxes Online?

Individual e-file Electronic Tax Filing Program Overview

Another Record-Breaking Number of Taxpayers Choose to Electronically File in 2007

Free On-Line Electronic Tax Filing Agreement

Tax e-filing Options for Individuals.

2007 Filing Season Kicks Off with New Features, Extended Tax Breaks; Tax Forms in Mail This Week