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Filing Taxes Online

Filing Taxes Online

Military.com Finance Center

January 07, 2009

Tax season is right around the corner and several military families will attempt to file their taxes on paper. However filing taxes on paper is a long and cumbersome process. If an individual taxpayer chooses to file without the help of a certified public accountant (CPA), the process can take hours. And, if mistakes are made the repercussions can take the form of fines or an audit.

In fact, nearly 50 percent of taxpayers will be audited in their lifetime because of errors or omissions, according to a guide titled, “Surviving an IRS Tax Audit.”

E-filing is the latest and most popular way to file taxes. Filing online not only reduces the errors made during this process, but also cuts down on the amount of time it takes to file. What’s more, most e-file websites provide tax experts, communication specialists and economists to help e-filers through the process.

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Here are a few other benefits to filing online, according to tax-experts:

Saves money — The cost of hiring a CPA or another tax professional can range from $50 to $200. Tax preparation software or filing online costs range from $30 to $80 depending on the complexity of the program. Additionally, more sophisticated programs can alert filers to any deductions they might not of been aware of.

Assists with record keeping — When you file online all of your necessary information is right there on your computer (it’s wise to back-up all information on a disk). E-filing provides filers with an easy-to-access record of tax filings from the previous year. Additionally, when the next tax season rolls around, if your income and deductions are similar, updating the figures and facts will be simple.

Precautions

The growing popularity and convenience of e-filing prompted the IRS to provide Free File — free e-file service — to taxpayers. However, only taxpayers with an Adjusted Gross Income of $50,000 or less qualified for the service. The IRS warns that taxpayers who used Free File in the past might not qualify for the services in 2006. Free File users should check IRS.gov in mid-January for information.

If a taxpayer doesn’t qualify for Free File, there are other options. But, taxpayers should take certain precautions before buying e-filing software or filing online. The Internal Revenues Service recommends taxpayers verify the following services:

Free Services provided by commercial companies

Members of the tax software industry provide these free tax preparation and electronic filing services — not the IRS. Once taxpayers choose a particular company, they will be sent directly to the company’s commercial website. Any questions about a particular service or company should be directed to the company providing the free service and not the IRS. Please contact the company to resolve any income tax issues. To find out how to contact the company, please refer to the company’s website for more information about their customer service options.

The government believes that the private industry, given its established expertise and experience in the field of electronic tax preparation, has a proven track record in providing the best technology and services available. In addition, the government believes a partnership with private industry will provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.

Next: Go Through IRS.gov >>


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