Filing Requirements Summary A summary of the filing requirements for various types of individual.

Electronic Tax Filing

Here is the IRS's list of information needed by a taxpayer before e-filing either from home or via a professional tax preparer:

• Social Security numbers for yourself, your spouse, and any dependents;
• W-2 forms from all employers are required for yourself and your spouse;
• 1099 forms for Dividends, Retirement, or other income, or any 1099 forms with Income Tax Withholding;
• Receipts for expenses for Itemized Deductions (Schedule A);
• Receipts and records for other income or expenses;
• Bank Account numbers (for a fast refund, or to pay electronically);
• Complete information on what records you need, and how long to keep your records;
• Prior year Adjusted Gross Income amount if using a Self-Select PIN as your signature;

Filing software is available from very many commercial firms. Taxpayers with an Adjusted Gross Income of $54,000 or less can use Free File, a free service provided by a number of larger commercial firms approved by the IRS.

In May 2007, it emerged that the recently completed 2007 tax filing season had seen over 76 million electronically-filed individual tax returns and more than 140 million visits to the Internal Revenue Service website.

“E-file and our other electronic services helped us deliver a strong filing season for the nation’s taxpayers,” stated IRS Acting Commissioner Kevin M. Brown. “Again this year, millions of additional taxpayers gave up paper tax returns to file electronically. E-file and IRS.gov were among several factors that helped us overcome one of the most challenging filing seasons ever for the IRS.”

The year’s tax season saw a surge in electronic filing among last-minute filers, a group that has traditionally sent in paper returns. During the week that included the tax-filing deadline (April 14 to 20) alone, the number of electronically-filed returns received by the IRS jumped 35% over the same week last year, even though the overall number of returns (paper and electronic) received during the same week only rose 12%.

New records were also set for the number of returns e-filed by home computer users, the number of balance-due returns filed electronically and the number and amount of direct-deposit refunds.

The over 76.7 million e-filed returns accepted through May 4 topped the more than 73.2 million electronically-filed returns received for all of 2006. It also showed an 8.9% increase over last year at this time, with most of the increase coming in March and April. Based on current trends, the agency expects around 58% of all returns to be e-filed this year. Taxpayers who filed for extensions can use e-file until Oct. 15.

A record 22 million taxpayers e-filed from a home computer, up 11% over the same time last year and eclipsing 2006’s year-long total of 20.3 million.

In addition, during the filing season in question, visits to IRS.gov, the agency’s website, climbed almost 10% to more than 140 million.

The average refund this year was $2,255, a 2.5% increase over last year at this time. More than 59 million refunds, a new record, were deposited directly into savings, checking and brokerage accounts, representing more than 61% of all refunds issued. Those who choose direct deposit get their refunds at least a week sooner. Nearly $158 billion have been directly deposited so far this year, an 11% jump over last year at this time. This surpasses the 2006 year-end total of $149.2 billion.

The number of balance-due returns filed electronically surged 14.2% to a record 9.4 million. For all of last year, almost 8.9 million balance-due returns were filed electronically.

However, in July 2007, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican Member Chuck Grassley (R-Iowa) expressed serious concerns over an audit finding computing errors in the commercial tax software currently provided through the Internal Revenue Service’s Free File program.

The audit by the Office of the Treasury Inspector General for Tax Administration (TIGTA) identified multiple calculation errors made by the commercial software of Free File Alliance firms, and recommended that the IRS test the software for tax law accuracy.

As previously indicated, Free File directs low-to-middle income taxpayers from the IRS website to online tax preparation firms for tax assistance.

While admitting that it does not conduct such tests, the IRS disagreed with TIGTA’s recommendation, arguing that testing commercial software for tax code compliance would be all but impossible. Furthermore, the IRS acknowledged that it has no contractual authority to require Alliance members to correct identified errors.

“When the IRS refers taxpayers to an online filing service, those taxpayers have a right to expect accurate tax preparation. If the IRS really doesn’t have the authority to require its Free File partners to get the software right, then they’ve got a bad agreement with these companies that doesn’t protect taxpayers as it should,” observed Baucus. “At a minimum, the IRS needs to provide better assurance that Free File tax software can handle the most basic tax scenarios. But this report underscores the need for a direct filing portal on the IRS website, where the agency makes certain that the tools supplied to taxpayers comply with the tax code.”

Grassley added: “This is frustrating for Congress and taxpayers alike. We’re in the digital age. We have cameras on our cell phones. We have Blackberries. But we can’t get a free electronic filing option for taxpayers to work right. Some of these software programs can’t properly compute a tax return using common basic scenarios. Reliability and accuracy are a problem. Taxpayers have every reason to question whether they’d be better off with a pencil and an abacus than using the current free file program. That has to change. Taxpayers should have the option of a free, accurate way to file their taxes electronically. Congress and the IRS need to ride herd over the software companies, ensure corrections of flagrant problems, and make this program work.”

Current tax software is held to a minimum standard, and TIGTA agreed that testing all software for compliance with all laws is not feasible. However, TIGTA concluded that the IRS could easily test software used as part of the Free File Alliance for common tax scenarios, just as TIGTA (with limited resources) had done during the audit.

TIGTA also found that the IRS does not sufficiently promote its Free File program. Many American taxpayers with incomes of less than $50,000 per year are eligible to use the service, but few take advantage. The IRS agreed to develop a comprehensive Free File marketing program.

In 2009, The Internal Revenue Service (IRS) announced that a record 90 million tax returns were filed electronically this year, led by a big increase in people using home computers.

For the first time, more than 30 million individual income tax returns were filed from home computers. By April 24, the IRS had accepted 31.2 million returns filed from home computers, up 19.3% from the same time last year.

By April 24, the IRS had accepted 90.6 million income tax returns through e-file, up almost 6% compared to the same time last year.

“E-file is a great option for taxpayers, and this year’s record is another sign people enjoy the speed and accuracy of e-file,” said IRS Commissioner Doug Shulman, who added:

“We remind taxpayers with extensions who haven’t filed yet that they can still take advantage of e-file.”

A higher percentage of the population is choosing to e-file this year. As of April 24, almost 70% of individuals chose to e-file their tax returns, compared to 61% for the same time last year. The IRS will continue to accept income tax returns through IRS e-file and Free File until October 15.

According to the IRS, e-file is popular because it’s fast, safe and accurate. An electronically prepared and filed return has an error rate of less than 1%, compared to an error rate of about 20% for a paper prepared return.

Further to this, the IRS has explained that people can receive a refund in as little as 10 days if they use electronic filing and direct deposit. Also, people who owe can also pay electronically by debiting their financial account or using a credit card.

BACK TO TOP