Tax season usually heats up once that Groundhog Day is here. That’s usually the time you start getting your 2008 income tax information your income sources. 

But there is still two months yet before the deadline but time does fly. Before you know it you’re scrambling to get your federal income tax return done.

Filing one’s taxes electronically seemed like a novelty 10 years ago but accounts for almost six out of 10 returns today.

For the 2007 tax year that taxpayers filed a year ago, the Internal Revenue Service received almost 90 million by way of electronic filing out of a total 155.5 million returns.

And almost 27 million returns were filed from home computers, an increase of 19 percent from the previous year’s total of 22.6 million.

The options for free e-filing are increasing as well, said IRS spokeswoman Lea Crusberg.

For the 2008 tax year, which taxpayers will file by this year’s April 15 deadline, people with adjusted gross income of $54,000 or less - about 70 percent of all taxpayers - are eligible for free filing through the IRS in a partnership with some software manufacturers.

Last year, almost 4.8 million returns were sent through free-file, an increase of 24 percent compared with the previous year’s 3.9 million free-filed returns.

Federal Income Tax refunds are available in as few as 10 days from filing if the taxpayer provides the IRS with direct-deposit information.

Another route taxpayers might choose is through a paid tax preparer who also provides refund anticipation loans. That means the preparer will provide you with most of what your expected refund is for a fee.

The IRS said another benefit of its e-filing system is taxpayers can file now and if they owe money, pay later - up to the deadline of April 15.

“The IRS does not charge taxpayers to e-file their completed returns, but some tax preparers and software manufacturers may charge a fee. However, this year a number of large software companies are waiving this additional fee,” the IRS said.

E-filed tax returns are encrypted and taxpayers will receive an acknowledgement within 48 hours that the IRS has accepted the return.

The IRS also said that e-filed returns have an error rate of 1 percent compared with 20 percent for paper-filed returns.

So take advantage of free-filing federal income tax if you qualify. But if you don’t, take advantage of the online tax prep companies - in most cases, they are cheaper than going to an accountant.
source: beaumontenterprises.com