Almost 53 million Americans chose IRS
e-file options in 2003 — 13 percent more than the year
before. The IRS expects millions more to e-file in 2004,
as more and more taxpayers who file through a computer
or a telephone look for these benefits:
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Faster refunds:
Direct Deposit can speed refunds to e-filers
in about two weeks — or even less.
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More accurate returns:
IRS computers quickly and automatically
check for errors or other missing
information, making e-filed returns more
accurate and reducing the chance of getting
an error letter from the IRS.
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Quick electronic
confirmation:
Computer e-filers receive an acknowledgment
that the IRS has received their returns.
Callers using TeleFile receive a
confirmation number while they’re still on
the phone, letting them know that the
TeleFile system has accepted their return.
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Delete the paperwork
through electronic signatures:
Taxpayers can create their own Personal
Identification Number (PIN) and file a
completely paperless return using their tax
preparation software or tax professional.
There is nothing to mail to the IRS.
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Easy payment options:
E-filers with a balance due can schedule a
safe and convenient electronic funds
withdrawal from their bank account, or pay
with a credit card.
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Federal/State e-filing:
Taxpayers in 37 states and the District of
Columbia can e-file their federal and state
tax returns in one transmission to the IRS.
The IRS forwards the state data to the
appropriate state tax agency. In 2003, more
than 22.7 million taxpayers filed
federal-state electronic returns in Alabama,
Arizona, Arkansas, Colorado, Connecticut,
Delaware, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana,
Maryland, Michigan, Mississippi, Missouri,
Montana, Nebraska, New Jersey, New Mexico,
New York, North Carolina, North Dakota,
Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
Island, South Carolina, Utah, Vermont,
Virginia, West Virginia, Wisconsin and the
District of Columbia.
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e-file Options
Free Internet Filing
For the 2004 filing season, at
least 60 percent (78 million) of individual taxpayers
will be eligible for IRS Free File. Tax software
companies and the federal government are teaming up to
offer free online tax preparation and electronic filing
services to eligible taxpayers. Free services are
accessible through IRS.gov. Eligibility requirements
will be on IRS.gov beginning in mid-January 2004.
Using a Personal Computer
Taxpayers with a computer, a
modem or Internet access and tax preparation software
can e-file their tax returns from home any time, day or
night. To do so, a taxpayer sends a completed,
electronic tax return to a transmitter. The transmitter
converts the file to an IRS-approved format and then
sends the converted return file to the IRS. Within 48
hours, the IRS notifies the taxpayer through the
transmitter whether or not the return is accepted.
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In 2003, 11.9 million taxpayers
e-filed their returns from home, 27 percent more
than the year before.
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Using an Authorized Provider
Computer filing through an
authorized provider has been the core of e-filing since
its debut in 1986. Using this method, tax professionals
send clients’ returns electronically to the IRS. Some
prepare their clients’ returns and send them, others
take returns prepared by their clients, enter the data,
then e-file it with the IRS.
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Authorized providers filed 37
million returns in 2003, up 11 percent from the
previous year.
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E-Filing By Phone
For those who are eligible,
TeleFile, the IRS file-by-phone system, is the easiest
way to file a return.
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In 2003, 4 million people used
TeleFile instead of filling out Form 1040EZ.
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Potentially eligible TeleFile users
get a special tax package from the IRS that invites them
to file their taxes quickly and easily by phone. Instead
of tax forms, the package has a worksheet that, when
completed, becomes the taxpayer’s TeleFile Tax Record.
This record includes a Customer Service Number that
serves as an electronic signature.
The package also contains a checklist
the taxpayer uses to ensure eligibility. Then, all the
taxpayer does is fill out the worksheet, call the
toll-free number and follow the step-by-step
instructions.
TeleFilers can take advantage of
Direct Deposit for a refund, or authorize an electronic
funds withdrawal to pay taxes, by entering their
checking or savings account number. Refunds arrive in
half the time it takes for a paper return. For an
electronic funds withdrawal, the taxpayer decides when
the money is taken from their account, so they can file
their return early and pay later by the April 15, 2003,
deadline.
Extension of Time to File by Phone
Anyone who filed a tax return
last year can use the phone to request an automatic
extension of time — to August 16, 2004 — to file his or
her tax return. This system will operate from February
13 to April 15, at 1-888-796-1074. Form 4868,
Application for Automatic Extension of Time To File U.S.
Individual Income Tax Return, has details on required
information and explains how to pay a balance by phone.
Telephone filers get a confirmation
number at the conclusion of their call, telling them
that their return or extension request has been
accepted.
Federal/State TeleFile:
Taxpayers in seven states can
e-file both their federal and state returns with a
single phone call to the IRS TeleFile number. Missouri
is new this year, joining Georgia, Indiana, Kentucky,
Oklahoma, West Virginia and Maryland. Only taxpayers who
receive both federal and state TeleFile packages can use
the combined TeleFile system.
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In 2003, 345,422, taxpayers filed
their state and federal tax returns with a
single phone call, up 16 percent over the prior
year.
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Electronic Signatures — Personal Identification Numbers
(PINs)
For the 2004 Filing Season, taxpayers
will be able to select one of the following options for
signing their e-filed return:
Self-Select PIN
The Self-Select Personal
Identification Number (PIN) allows taxpayers to
electronically sign their e-filed return by entering a
five-digit PIN. The five-digit PIN can be any five
numbers except all zeros. Receipt of the taxpayer’s PIN
eliminates the requirement for Form 8453. The
Self-Select PIN method requires the entry of each
taxpayer’s Date of Birth and Prior Year original
Adjusted Gross Income, which are used to authenticate
the taxpayer.
Paperless filing is available to those
who prepare their own returns using tax preparation
software or those who use a tax professional. On a joint
return, two PINs are required, acting as electronic
signatures for both people.
The Self-Select PIN Program began in
2001, but by 2003, self-select PINs were used to e-file
11 million returns, up 12 percent over the prior year.
Practitioner PIN
The Practitioner PIN is an
additional electronic signature option for taxpayers who
use an electronic return preparer. Those using a tax
professional can sign their return electronically by
completing an e-file signature worksheet. The worksheet
authorizes an electronic return preparer to enter a
taxpayer’s PIN as a signature.
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24.2 million taxpayers e-filed
through a paid preparer and used a self-select
PIN or a practitioner PIN in 2003, up 41 percent
over the prior year.
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The "Electronic Services" section of
the IRS.gov has more information about IRS e-file, free
Internet filing, the self-select PIN, the practitioner
PIN and private sector partnerships.
Direct Deposit
One electronic transaction
that is available to both e-filers and those filing a
traditional paper tax return is direct deposit. About 44
percent of all refunds were directly deposited in 2003,
representing half of all refund dollars.
Choosing direct deposit is easy; paper
return filers just enter their account number and
routing number in the boxes provided on Form 1040, 1040A
or 1040EZ. (There is an illustration explaining how to
choose direct deposit in the tax return instructions.)
Those who choose direct deposit will get their refunds a
week quicker than those who receive a paper check. Also,
a refund that is directly deposited in a savings or
checking account cannot be stolen or lost in the mail.
During 2003, 44,422,000 refunds were
directly deposited, up from 39,774,000 during 2002, an
increase of almost 12 percent. The average direct
deposit refund in 2003 was $2,362. In 2003, $104.9
billion was deposited electronically, up 12.2 percent
over the prior year.
Updated 2005 IRS e-file info -
CLICK HERE |
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