TAX NEWS - DECEMber 2009

Tax E-filing: An e-Filing Checklist to Prepare for Tax Season

Tax filing season is just a few weeks away. This year, employees who e-file their return will find the process to be much easier and quicker than paper filing. Many software companies now allow e-filing at no additional cost, and many states encourage e-filing as well. Here's a handy checklist to help employees get ready to e-file this tax season:

1. gather and organize supporting tax documents. For taxpayers who itemize deductions (Schedules A & B), these will likely include records of:
- Home mortgage interest payments
- Real estate tax payments
- Medical and dental expenses
- Contributions to charitable organizations
- Refunds from the previous year's state and local taxes
- Unreimbursed employee expenses
- Tax preparer fees from the previous year, if applicable

Place receipts in large envelopes or file folders with the amounts totaled and written on the front.

2. Secure the computer on which the return will be prepared:
- Use anti-virus and anti-spyware software. Remind employees to perform regular virus scans, download updates and install firewalls, especially before beginning their online tax preparation.
- Avoid shareware or peer-to-peer (P2P) software, such as that used to share music files or videos across the Internet. If employees choose to run this software, they should make sure that their personal data is in an encrypted directory or one that the peer-to-peer community can't access.
- Use software programs and vendors approved by the IRS. See the list maintained at IRS.gov.

3. Check out two options on IRS.gov to e-file for free:
- Employees may qualify to use Free File. (Check the IRS website for the latest information.) This program accessed only at IRS.gov or they may be charged a fee is convenient, free, fast and accurate, and provides step-by-step help in filling out and submitting online forms. Free File covers the most commonly filed federal tax forms and schedules and is also available in Spanish.
- Free File Fillable Forms allow anyone to prepare and file their federal tax return online for free. This option is best suited if employees can successfully prepare their own return without the assistance of a tax preparer. The most commonly used federal tax forms are available, although state forms and state e-file are not.

Both options are safe and secure. Plus, employees can e-file at any time and get an emailed confir-mation within 24 hours stating that their return was received by the IRS. Those who are due a refund can get it within 10 days using Direct Deposit. If they owe money, they can e-file the return first and make their payment separately before the April 15 deadline.

For employees who work with a tax professional:
- Ask the preparer to e-file the return. Many offer this service, but taxpayers may need to ask. Even if they have to pay a fee, most find the benefits worthwhile. They should bring their previous year's adjusted gross income as a means of electronically signing their return.
- Make an appointment as early as possible. Those who wait until April may find that their returns have to be extension filed.
- Bring all organized documents. This will reduce the preparer's time, saving the employees money. Also, collect and bring tax-related forms received in the mail, such as the W-2, 1099-INT, etc.

This year, help employees get a head start on tax season. By using this checklist, they should be well prepared when they sit down to e-file their returns.