Hello, IRS? I'll Let You Do My Taxes This Year
From phones to computers, tax-filing options multiply
NEW YORK — WHO do you call when you've got your tax information together and you can't wait to get your hands on your refund?
The Internal Revenue Service. The most basic of all federal income-tax forms - 1040EZ - can actually be filed with a short phone call. You won't be alone: About 3 million taxpayers are expected to phone in returns this year. Or, if you are filing a more complicated return, including Form 1040, you still may be able to file with a phone call - from a computer either in your home or at a private tax-preparation service.
The age of electronic tax-filing has arrived.
The paper-and-pen method still works perfectly well, of course. But of about 116 million returns the IRS expects to receive in 1996, 4.6 million are expected to be filed from home computers and another 13 million electronically by other means.
Anthony Burke, an IRS spokesman in Washington, sees several advantages of electronic or telephone filing over mailed-in returns:
* The filer saves postage.
* The newer systems are more accurate, since IRS data-transcribers have less to do, thus cutting down on errors.
* Taxpayers get speedy acknowledgment of filing (within 24 hours for electronic filers, immediately for phone filers).
* Refunds are speedier.
''We are finding more and more people filing electronically now,'' says a spokesman for the H&R Block tax preparer's office in Edison, N.J. ''The filers come from all backgrounds. The advantage is that the turnaround time on a refund is four days here. If you come in on a Monday, your refund will be here by Friday, and maybe Thursday.'' He adds that ''it only costs $30 for the transmission if you've already prepared your return.''
Here's the low-down on each of these high-tech filing methods:
Telefiling. Under this paperless system, taxpayers can call in a return if their 1040EZ tax package from the IRS carries a personal identification number that acts as their signature. A taxpayer must have income of less than $50,000, live at the same address as last year, and be single.
Using a touch-tone phone, the telefiler calls in to a special number. The caller will have to identify his or her wages, interest income, and tax withheld. The IRS figures out the actual tax or refund due while the taxpayer is on the line.
''The whole process takes about 10 minutes,'' Mr. Burke says. Refund checks are sent within about three weeks. If a tax is due, it must be mailed to the IRS by April 15, 1996, the normal due-date.
Electronic filing. Tax preparers and other firms offer this service for a fee. If you hand in your tax return on paper, they put the information on a computer and file it over a phone line. Electronic-filing services can be found in the Yellow Pages. And in some cities, the IRS will actually transmit your return for free.
If you owe taxes, you can still file the return early and defer payment until April 15. If you get a refund, you can ask the IRS to have the money deposited into your bank account. In 31 states, some filers can send state returns to the IRS along with their federal returns. The IRS forwards the state return to the appropriate state tax agency. Check with your state IRS office to see if it participates in this program.
On-line filing. Once you've figured out your taxes on your home computer (using tax-preparation software) you can transmit your completed return to the IRS by an on-line transmission service. A list of on-line filing options is available through the IRS home page on the Internet's World Wide Web at: http://www.irs.ustreas.gov. The IRS home page also offers forms, publications, basic tax information, and a list of key changes in the 1995 tax code.
1040PC program. This software program, available through computer stores and retail outlets, will cut a standard 12-page return to about two pages. Taxpayers sign the 1040PC ''answer sheet,'' which accompanies the program, and send it by mail, along with required documents such as the W-2 form, to the IRS. A refund can be sent directly to a bank account. If a tax is due, the program prints out a payment voucher to be sent along with the check and other documents.