Living in the world of accounting news from 9 to 5 everyday, it's become apparent that not a heck of a lot of my day job transfers over to my world outside of work.
Sure, every once in a while I'll find a way to drop into discussion a tale of an especially egregious tax scheme, or find someone willing to talk about the Sarbanes-Oxley Act without needing a primer on what the legislation is all about. But usually, when I tell people what I do for a living, I just get met with a sigh of disappointment after I clarify that no, I'm not an accountant and I can't help them with their taxes.
Around this time of year, though sighs of disappointment get louder and come with increasing regularity from friends whose tax paperwork, I suspect, consists of little more than a single W-2 form. So I've started another tact, and simply ask them why they're not using the Internal Revenue Service's Free File service?
According to the IRS, m ore than 70 percent of the nation's taxpayers -- over 92 million people -- qualify for Free File this year. The program is provided through an agreement between the agency and the Free File Alliance, a private-sector consortium of tax preparation software companies. Simply put, anyone with an adjusted gross income below $50,000 can qualify to get their federal forms returned using free online tax preparation software. And most of the participating software companies charge only an additional $20 to $30 to electronically prepare and file state returns as well.
That's still a good deal for access to the latest brand-name programs that make filling out tax forms a virtual no-brainer.
The amazing thing to me, though, is how few of my friends have heard about the program and are planning on using it. Unless they're being shy about having jumped into a higher tax bracket, most qualify and don't seem to believe the process is as easy as it sounds. But it is.
Just a little more than 5.14 million taxpayers used Free File last year, almost a 50 percent increase from the 3.5 million users who used the program in 2004. With TeleFile no longer an option, the agency is hoping most of the 3 million people who used that filing option last year make the move to online filing. The growth in just a few years is good to see -- Free File debuted in 2003 with nearly 2.8 million users -- but considering 92 million taxpayers qualify -- there's still quite a bit of market to penetrate.
For all the talk about the need to simplify our country's tax system, it's foolish not to take advantage of the opportunity the IRS is offering to solve some of its taxpayer's April 15 headaches.
Free File must be accessed through www.IRS.gov , by visiting the "Free File Homepage" right off the agency's homepage. Answering a few short questions will lead the Web site to offer up a range of free online filing choices and from there, it's up to you to either shop around for who can file your state returns cheapest. For your federal forms, there's no fine print to read, or catches to the program. And that's what I've been telling anyone who asks me for help with their taxes.
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