IRS Offers Online Tax Filing for Free
Feb. 18, 2005 — -- In this week's Cybershake, we take a look at how the Internal Revenue Service is helping to reduce the amount of paper and money American taxpayers spend on preparing their annual income tax report. Plus, we note what one tech pundit says about the new Mac Mini from Apple.
With Valentine's Day over and the impending change of seasons, millions of Americans will soon be facing that much dreaded annual event: Filing their taxes. But this year, the IRS is offering to take some of the sting out of preparing complex paper-based forms.
For the last several years, the government agency has been working with software and technology companies to develop and run its Free File service. It was designed to allow taxpayers in lower income brackets to prepare and file their annual returns for free online.
Now, for the first time, the Free File service is open to anyone who needs to file a return with the IRS.
Taxpayers who go to the IRS Web site to use Free File can browse among the 20 different online options.
Some of the participating companies offer their free filing services only to those who meet certain eligibility requirements -- age, military service and income level, for example. Others -- such as H&R Block, a national tax preparation service that also sells the popular TaxCut software -- provide their services without restrictions.
H&R Block spokesman Tom Linafelt said its free online preparation and filing service offers similar benefits as those found in its TaxCut program, which is sold online and at software retail outlets.
"They really simplify taxes, they cut the time it takes to prepare your return, and they dramatically cut the time it takes to get your refund," said Linafelt.
So why would anyone pay as much as $30 for a tax preparation program when they can get it free online? Providers believe it's a matter of advanced options.
TaxCut and its chief rival, TurboTax from Intuit, can pull electronic data from money management programs such as Intuit's Quicken software. And fee-based tax prep programs and filing services often make it easier to electronically file state income tax reports too.
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