Wednesday, January 14, 2009

Your tax refund race starts Friday

The Internal Revenue Service is opening its free electronic tax filing sites Jan. 16, even to taxpayers who made too much money to use the service before.

IRS basically hopes it will beat last year's record nearly 60 percent participation in government and commercial electronic filing choices. IRS free filing is available only through the service's official Web site, David Williams, IRS' electronic tax administration director, said in a telephone press conference.

Two levels of free service are available. Taxpayers whose adjustable gross incomes were $56,000 or lower, are eligible to use the traditional Free File Alliance service, which includes a user-friendly question and answer format to guide filers through the forms and identify all the tax breaks for which they qualify, Williams said.

There have been a raft of new tax changes this year, some passed as recently as October. IRS especially hopes free filing will help people who need cash now to get refunds faster. E-filing can get you a refund in as few as eight days. Filing an old-fashioned paper return can delay the check for as long as 12 weeks.

Taxpayers who don't qualify for that help still can use the new Free File Fillable Forms that will be added to the site this year. Those basically are electronic versions of the same paper forms that have always been available. Starting Friday, though, you can fill them out and file them on line instead of downloading, filling and mailing.

Free fillable forms will check your math, but don't offer the Q&A navigational help. IRS doesn't know how many people will feel tax savvy enough to use the new forms.

"There is a huge amount of information you need to know," Williams said.

IRS free filing accomodates only federal returns. You will need to check with your state department of revenue or neighborhood tax professional to find how best to handle your state income tax return.

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