Internal Revenue Service expands e-file features for 2008 tax returns

BOSTON – The federal Internal Revenue Service (IRS) says new e-filing features are available to taxpayers who are electronically filing their 2008 tax returns.IRS Commissioner Doug Shulman said taxpayers should explore e-file this year as the best option to file accurate tax returns and get fast refunds during the current economic downturn. The e-file program also includes new improvements to the Free File program that will allow nearly all taxpayers to e-file for free.”These are tough times, and e-file is the best way for people to get cash in their pocket quickly,” said Shulman. “Filing electronically with direct deposit can get refunds to taxpayers in as few as 10 days. Combined with important changes in the Free File program, we believe e-file is a better option than ever before for the nation’s taxpayers.”Last year the average refund was $2,429. The IRS realizes people need their refunds quickly, said Shulman, who urged those who haven’t e-filed before to consider the e-file option this year.Last year, in Massachusetts, over 2 million returns were filed electronically, including more than 595,000 that were self-prepared.Nationwide, IRS e-file totaled nearly 90 million tax returns in 2008.Almost 58 percent of all returns were filed electronically. Last year, there was a surge in e-file from home computers. Nearly 27 million people prepared their own e-file return. That’s an increase of more than 19 percent from the previous year.”IRS e-file meets the needs of nearly all taxpayers, no matter how complicated or simple their returns are. E-file helps taxpayers take advantage of the tax credits available to them to maximize their refunds during these tough economic times,” said Peggy Riley, an IRS spokeswoman in the Boston office.A variety of tax software products are available commercially that offer e-file. This year, several of them will not charge additional fees for e-filing for the first time, she said.In addition, most taxpayers qualify for free tax preparation offered through Free File on IRS.gov. Regardless of income level, taxpayers who are comfortable with filling out paper tax forms and who don’t need extra assistance can use the IRS’s new Free File Fillable Forms. These new online versions of paper tax forms that can be e-filed are available for the first time by visiting the IRS.gov Free File site.The e-file system has several benefits, like choosing direct deposit, which means a refund can be received in as few as 10 days, Riley said.”That’s because with e-file, there’s no paper return going to the IRS. And with direct deposit, there’s no paper refund going to the taxpayer. So it’s all electronic and much faster than paper,” she said.E-filed tax return information is protected through encryption. Taxpayers receive an acknowledgement within 48 hours that the IRS has accepted their return.Free File, which is a form of e-file, is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the IRS and the Free File Alliance LLC.The alliance is a group of private-sector tax software companies. Since Free File’s debut in 2003, a total of more than 24 million returns have been prepared and e-filed through the program, Riley said, noting that Free File offers 20 different software options that can assist taxpayers with an Adjusted Gross Income (AGI) of $56,000 or less in 2008 to e-file their federal tax returns for free.”That means 70 percent of all taxpayers – 98 million taxpayers – can take advantage of tax software that will help them complete their returns through the Free File program,” she said. “Three companies are offering their products in Spanish.”This year, the IRS and its partners are offering a new option, Free File Fillable Tax Forms, which opens up Free File to virtually everyone, even those whose incomes exceed $56,000.