Preparing your income tax return doesn’t have to stress you out. There are several things you can do to ease the pain when it’s time to file your tax return. The IRS offers taxpayers several tips to help you complete the task of preparing your income tax return.

1. Don’t wait until the last minute
   Don’t wait until the last day to file taxes. Rushing to file by the tax due date may cost you money. It increases the risk of making errors and it may cause you to overlook potential tax savings. If you don’t know how to do your taxes, seek out tax return help from various sources that are available. You can seek tax help from your accountant, tax preparer, tax attorney, tax software or even a knowledgeable friend. You can even visit the IRS website for tax help and to get answers to your tax questions.
2. Use Free File
   Qualifying taxpayers can take advantage of the income tax services provided by the IRS. Free File allows you the ability to file your income tax using online tax software for free. Everyone can find an option to prepare their tax return and e-file it for free. If you made $57,000 or less, you qualify for free tax software. If you made more than $57,000 and know how to prepare your tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms.
3. Try IRS e-file.
   IRS e-file is quickly becoming the preferred means for filing income tax returns. For the 2010 tax year almost 80 million people used e-file to file their income tax return. If you owe taxes, you can file immediately and pay later (by the April 17 tax due date). E-file offers you the option of receiving your tax refund via direct deposit. It’s the quicker and fastest way to get your tax refund, sometimes in as little at 10 days.
4. Don’t panic if you can’t pay.
   If you can’t pay the full amount of taxes you owe by the mid-April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. A majority of taxpayers eligible for an Installment Agreement can apply using the web-based Online Payment Agreement application available at the IRS website. www.irs.gov. To find out more about this simple and convenient process, type “Online Payment Agreement” in the search box at www.irs.gov.
5. Request an extension of time to file – but pay on time.
   If you’re not finished preparing your tax return by the tax due date, you can get an automatic six-month extension through Oct. 15. In order to get a tax extension it must be filed or postmarked by the April 17 deadline. But remember, a tax extension does not give you more time to pay any taxes due. If you have not paid at least 90 percent of the total tax due by the April deadline you may also be subject to an estimated tax penalty. You can obtain an extension through Free File at www.irs.gov/freefile or by calling 800-TAX-FORM (800-829-3676) to have a paper form mailed to you. Allow at least 10 days for mailed forms and publications.

Take advantage of these tips to reduce your tax season stress and remember the IRS is always available to provide tax help, answer your tax questions and guide you in your quest for free tax software.

It’s hard to believe that in just twenty five years, the Internal Revenue Service’s online income tax filing, efile, has grown from processing 25,000 individual income tax returns annually to over 100 million.

The IRS efile has surpassed a landmark of 1 billion individual Form 1040 tax returns received and processed safely and securely. The electronic tax filing is arguably the most successful modernization program ever undertaken by the federal government.

In the 1980s, processing tax returns became increasing ineffective because of the complex, time-consuming and error-prone process of converting hard copy tax returns into a form that could be processed by machine. In addition, the IRS was facing a growing problem of increased cost and space to house the reams of paper forms and tax documents. And so the age of electronic tax filing was born.

The initial IRS efiling process was initiated by a tax preparer using a machine called a Mitron, which was a tape reader with a modem. The tax preparer would insert the tape into the Mitron to transfer the tax data. At the IRS, an employee would transfer the tape into a super mini-computer called Zilog.  Zilog would read the data and convert it to a format that the IRS’s Unisys system could process.

In 1986, the IRS launched it’s electronic tax filing pilot program. Five tax preparers in 3 cities participated, efiling 25,000 tax returns. Although the program could only accept simple returns that were due a refund, it was deemed a success and the pilot was expanded.

In 1987, 66 tax preparers used the online income tax filing system, filing 78,000 tax returns. That year, functionality was added to allow electronic Direct Deposit to put tax refunds directly in the bank accounts.

The following year, a technological update by the IRS to an IBM Series I processing system, eliminated the need for an IRS resource to plug the phone into a modem. Tax preparer interest in electronic tax filing exploded. 583,000 tax returns from 16 IRS districts were filed in 1988.

The efile program was expanded nationwide in 1990. 4.2 million returns were filed electronically.

In 1998, Congress passes a provision setting a goal of an 80% efile rate for all federal tax returns. The following year, efile functionality is added that allows electronic payments through credit cards and direct debit.

Efile becomes entirely paperless in 2002, when the IRS allows taxpayers to sign their tax returns electronically using a Personal Identification Number (PIN).

By 2007, more than 50% of all individual income tax returns were filed electronically (79.9 million).  And in 2010, that percentage jumped to 72% (93.4 million).

In 2011, Efiled returns cross the 100 million threshold in one filing season; cumulative total exceeded 1 billion returns. Approximately three out of every four individual tax returns were filed electronically.

source: irs.gov

Tax Day, April 15, is quickly approaching. It is when federal income tax returns are due and the last day U.S. citizens and resident aliens can mail their returns without incurring penalties. Even with the tax deadline just days away, individuals having difficulty preparing their income tax return can still get free tax help.

The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offers free tax help for taxpayers. The programs can help taxpayers by answering tax questions, offering tax advice, discussing tax problems and providing free tax return preparation assistance. Most VITA sites also offer free electronic filing (e-filing)

To take advantage of the VITA program, individuals must earn less than $49,000 and cannot prepare their own tax returns.

The Tax Counseling for the Elderly Program provides free tax help to people 60 and older. TCE is run by trained volunteers who provide free income tax counseling, answer income tax questions and help the elderly with tax problems.

Individuals in the military can also take advantage of the Volunteer Income Tax Assistance (VITA) Program through the Armed Forces Tax Council (AFTC). The AFTC consists of the tax program coordinators in all branches of the military, including the Coast Guard.

Members of the military and their families can get help with free tax preparation, having their military specific tax questions answered and consultation on any tax problem they may have.

When visiting the VITA/TCE sites don’t forget to bring the following:

• Proof of identification (Social Security Cards for you, your spouse and dependents)
• Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
• Interest and dividend statements from banks (Forms 1099)
• Bank routing numbers and account numbers for Direct Deposit
• Total paid for daycare provider and the daycare provider’s tax identifying number
• A copy of last year’s federal and state returns if available (if available)
• To file taxes electronically on a married-filing-joint tax return, both spouses must be present to sign the required form

For more information on TCE, call 1-800-829-1040 or log onto www.irs.gov

In this economic climate it makes sense to take advantage of the free tax help provided by the IRS.

source: irs.gov