IRS E-file Up and Running

The IRS began accepting 2007 tax returns through e-file today, January 11, 2008. It's really simple to use, and much more convenient for people to file their taxes and receive refunds electronically, or by check. It's up to you. You can even use e-file if you will owe taxes. The IRS website has step by step instructions if you wish to use the e-file method. They have a list of free sites, some that will also file your state taxes for free, or for a small fee. The IRS also can ask you a series of questions to determine which e-file site is for you. With a few simple questions about what you anticipate your adjusted gross income to be, your age, your spouse's age, and your location, they will send you to the best fitted site for your needs. Some of these sites do your state taxes for free, and some charge you a small fee.

Having used the e-file method for a few years now, I find it is the best way to avoid mistakes in preparing your taxes. These sites ask you specific information, you provide the answers and they will file the appropriate forms for you. By using this service, these programs know what forms you will need, and most will also give you advice to get ready for the next tax season such as how much you can contribute to an IRA, or other issues you may have come up, such as a child that will be too old for the child tax credit the next year. Even if you farm, or have a small business or partnership, and your income is below the set guidelines, you can use this service.

This is different from the numerous Tax Refund Anticipation loans through various professional tax preparers. You are not charged a fee for the service which through most anticipation loans is a percentage of your refund. Best of all, it's fast and easy, and you can do it from the comfort of your own home. If you can't finish it in one sitting, you can come back to it with your user name and password, and finish it at your leisure. Once you have finished answering the questions, it will ask you if you wish to have a check issued and mailed or if you would prefer electronic transfer of funds to your checking or savings account. All you need for that is your bank routing number and account number, and they file it and your refund will be automatically deposited into your account.

If you're tired of paying high fees for tax preparation, and you don't want the worry of possible mistakes, e-file could be for you. It's simple and straightforward. Just go to the IRS website, click on tab for Individuals, and check out the e-file options.

If the site you have chosen does not have free filing of your state returns, make sure you check with your individual state's department of revenue. Many are offering their own e-file direct with the state department of revenue, with the same benefit of having your refunds direct deposited for you.