Face facts. April 15 is one of those days many Americans would just as soon forget about, and were it not for the prospect of a prison term for tax evasion, many probably would.
For those who would like to get the tax season over and done with, and for those with relatively simple tax returns, filing electronically is a good option.
According to IRS statistics, a record 15 percent of the 119 million individuals filing tax returns last year submitted them electronically, most of them phoning in their returns.
This year, the IRS anticipates even more individuals filing electronically, and for two good reasons. The results are more likely to be accurate, since the calculation is done by computer rather than by the individual. And, those who are due money will get it back faster. Filing a paper return means waiting 40 days or more to see those hard-earned dollars again. Filing electronically cuts that time in half. For those who opt to have your funds deposited directly to your bank account, it can take as little as a week for the IRS to process a return.
Electronic filing can be done in several ways. A tax preparer will file a client's return electronically, for a fee of $30 to $50 fee above any preparation charges.
For more do-it-yourself approaches, read on.
More families are using personal finance software to track their expenses and their tax information. But even if you still do yours in longhand, several tax preparation software packages in the $20 to $50 range will allow you to file your taxes electronically. Several are reviewed below.
|The Online Options|
In February, Intuit and H&R Block launched competing Web-based services which allow users to file their tax information online.
Intuit's TurboTax Online is aimed at those with simpler tax returns, and is priced at $9.95, which includes use of the service as well as electronic filing.
Because Intuit's program is on the Web, there is a possibility of losing some tax information during a browser crash. Fortunately, Intuit's site breaks out tax information into multiple pages, saving each page as it goes. Users are able to enter information, leave the site, and come back to resume their work with no loss of information.
H&R Block has rolled out its Tax Cut software on the Web in a version that skirts the threat of a browser crash while meeting the needs of people with more complex tax returns. Priced at $19.95, Tax Cut Online installs to the user's hard drive and records tax information there as it is entered, so users are not vulnerable to data loss if the browser freezes up.
|Forms and Their Functions|
One thing to remember about electronic filing is that ou need to get it right the first time. The IRS, bureaucracy that it is, does not accept electronic transmissions of what they call "amended returns," also known as the 1040X form. There's a separate form for revised returns that must be sent by mail. Fortunately, these and other forms are available on the Net, as well as here at CBS.com, so you can at least fix your return without leaving the house. Get the forms you need from the link below.
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Written by Sean Wolfe, with graphic design by Charles Paek