For a number of years, the U.S. Internal Revenue Service (IRS) has been issuing refunds electronically, directly into citizens' bank accounts.* Taxpayers like this method because it is fast and secure. Now, thanks to the growing popularity of the agency's Free File service, more taxpayers are filing their returns electronically. As the name of the program suggests, the price is right.
Over 15 million returns have been submitted through Free File since the program was introduced in 2003. In 2006 alone, 5.1 million taxpayers used the system—and virtually all of them were happy with the experience. Ninety-four percent of those who used Free File plan to use it again, and 97 percent said they would recommend it to others. Here are few reasons they gave:
- You get a fast refund, often in 10 days or less when you also use direct deposit.
- You can file your taxes any hour of day or night.
- You receive a quick confirmation within 48 hours that your return was received.
The IRS offers the Free File service in partnership with close to 20 private-sector tax-software companies. To use Free File, you must begin on the Free File home page on the IRS Web site, where you can read about the programs offered by the different firms. You then choose a company and click through to their Web site. Once there, you use an online version of the company's tax preparation software. For an additional charge, many of the companies have software that you can use to file state returns.
The IRS designed Free File to be available to 70 percent of all taxpayers. This year, individuals with an adjusted gross income of $54,000 or under qualify. To ensure that you avoid paying a fee, you must start from the IRS Web site rather than the Web sites of the individual companies.
Reading a review of the Free File software programs can help you select one that works best for you.
*This article should not be treated as tax advice. All residents, potential residents, and family members should consult their own tax adviser for more information.