Access To Free Tax Calculation Software Boosts E-Tax Filing

by Leroy Baker, Tax-News.com, New York

28 March 2003

Over 2 million people have used the IRS's free tax preparation services this year, and the service looks set to boost the number of people filing their returns electronically. The programme hopes to encourages more people to file in this way by providing access to free tax calculation software.

The Internal Revenue Service expects 53 million out of the total 130 million tax returns it will receive this year to arrive electronically. This will be up on the 47 million e-filers last year, itself a record number.

The agency is hoping that 80% of all tax returns will be filed electronically by 2007. To help this process along, the service provides free access to various firms' tax preparation software via its website. It should transform the tax returns process making the whole experience quicker, cheaper and simpler, the IRS says .

Additionally, there are seventeen companies who provide tax software free of charge, and then transmit the data to the IRS along secure lines.

The majority of the free filing options are aimed at the lower end of the income spectrum. It allows less wealthy taxpayers to file their returns without the expense of a tax professional to do it for them. One such company that offers the service is TurboTax software, which offers a free filing service for those making less than $27,000 per year.

Other benefits resulting from e-filing include confirmation from the IRS that a return has been received. Refunds will usually arrive within two weeks, as opposed to eight weeks with the traditional method of filing. Also, some software packages actually offer the same advice as a tax professional, and can suggest ways optimising tax benefits.

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