Thanks for sharing this!

According to the IRS, over 68 million people—maybe including you—e-filed individual tax returns in 2004. Do you know how e-filing came about? Or how it works? Read on for an overview.

In 1986, the IRS and a few private sector firms began offering electronic filing to individual taxpayers. But these free services were inconsistent, not always free and not widely publicized.

In October 2002, the IRS signed a three-year renewable agreement that created a public-private partnership with Free File Alliance, LLC. The Alliance is composed of tax software manufacturers, and is managed by the Council for the Electronic Revenue Communication Advancement (CERCA). CERCA is a not-for-profit trade association.

Each participating company is listed on the IRS web site and offers guidelines to determine whether you’re eligible to use their free service. Eligibility is based on criteria such as income levels, age and/or state residency.

Once you choose the company you want to work with, the link on the IRS web site takes you to the alliance member’s web site. There, you prepare your tax return using the company’s software. When complete, your return is routed back to the IRS e-file system.

Sound simple? Lots of others think so, too, which explains why e-filing continues to grow in popularity. In 2002, 47 million tax returns were filed electronically. By the end of the 2004 filing season, 62 million returns were e-filed. The goal is to have 80% of all tax returns filed electronically by 2007.

You might also like these posts

Article – Preparing for Hurricane Season Image source: By Nilfanion , via Wikimedia Commons. The map shows the tracks of all tropical cyclones which formed worldwide from 1985 to 2005.The Atlantic hurricane season begins June 1. While the 2014 season is expected to be a mild one, mild doesn’t mean storm-free. Getting ready early is a good idea—and early preparati...
Article — Locked Out Image source: UK, public domain, via Wikimedia Commons What’s on your computer? Your manuscripts? Work? Photos? What would you do if you were denied access to those files—if you were locked out by rogue hackers? If you’re shaking your head because you think nothing on your computer is of value to hackers, consider th...
Article — Tax Identity Theft Awareness Week Image source: ftc.gov Taxes are scary enough, without adding tax identity theft to the mix. The costs—$3.6 billion a year according to an estimate by the US Treasury Inspector General for Tax Administration—are scary, too. Unfortunately, both tax ID theft and the costs are on the rise. The US Federal Trade Commission...
Article — Your 2013 Federal Income Tax Return Image source: IRS.gov Whether you’re a part- or full-time freelancer, receiving income means filing a tax return. Here are three things to keep in mind as you look back at your 2013 business activity. Dates: The IRS will begin accepting 2013 business returns on Monday, January 13, 2014. For individual returns, the da...

We write. Visit us in Carpenter Country, a magical place that, like our stories, is unreal but not untrue.

Posted in Articles Tagged with: ,