Filing a Tax Return Online

The IRS encourages taxpayers to file their tax returns electronically using its e-file system. The online service is free, fast and reliable.

The IRS said more than 80 million taxpayers used e-file to file their returns for tax year 2006, surpassing the 76 million e-filers who used the system for their year-earlier returns. In addition, more than 273,000 originators -- tax-preparation services and the like - were signed up for e-file in 2005, an increase of more than 5% from a year earlier.

According to the IRS, e-file also expedites tax refunds, shaving a week off the average time of three weeks to process a return. Thirty-seven states and the District of Columbia participate in IRS e-file's filing program so that you may file a state tax return together with your federal tax return.

Additional features of IRS e-file include:

Security. Choose a five-digit, self-selected personal identification number (PIN) to substitute as an electronic signature using IRS Form 8879, which authenticates your electronic signature and authorizes electronic payments and tax refunds between you and the IRS.

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Accuracy. The IRS claims an error rate of under 1% with e-file, well below an historical rate of about 20% for paper returns.

Verification. The IRS sends an electronic verification within two working days to the authorized tax professional, or electronic return originator that submits your return. (Note: Before the originator can submit your tax return with e-file, you will need to give it W-2 forms for the tax year.)

Instead of using an electronic return originator, you can also download free software from an IRS-designated Web site to send your return directly. Of the 72.8 million individual taxpayers who used e-file for the 2006 tax return season, 52.5 million returns were submitted by originators and 20.3 million submitted by individuals.

A link to e-file is prominently listed in several places at the IRS Web site (www.irs.gov).

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