Filing a return online expected by 100 million taxpayers

On Jan. 15, 2010, IRS e-file officially opened for business for the tax season. The IRS expects more than 100 million individual taxpayers to file their returns online in 2010 after banner years in 2008 and 2009.

The hundreds of millions of tax returns filed over the past three years mark a dramatic increase from the 25,000 tax returns filed online in 1986, the first year the IRS accepted online tax returns (download IRS e-file history here).

More than one-third of those 100 million taxpayers will file their returns online by personal computer; the rest will use a professional tax preparer or free file at an IRS site. No matter how you choose to e-file this year, here are some tips to make it as easy as possible:

Be prepared. Even though you won't be filing a paper return, you'll still need certain documents to get you started. Make sure you have the following information handy:

  • Identification information for yourself, your spouse and dependents. This includes Social Security numbers, full names and ages.
  • Prior year's tax return.
  • Forms W-2 from all employers for yourself and your spouse.
  • Forms 1099 for dividends, interest or investments.
  • Forms 1099 for retirement or any forms 1099 with income tax withholding.
  • Receipts and records for business expenses (Schedule C).
  • Records of purchases and sales of stocks, bonds and assets subject to capital gains (Schedule D).
  • Childcare expense receipts and the taxpayer ID number for your childcare provider.
  • Records for other expenses, deductions and credits.
  • Settlement sheet for a new home (first time home buyer's credit).
  • Bank Account Information (for Direct Deposit or to pay electronically).
If you itemize, you'll also want to include:

  • Medical expense documentation, including prescription and doctor's receipts.
  • Mileage logs for business, charitable and moving purposes.
  • Charitable deduction receipts.
  • Forms 1098 for student loans, mortgage and other interest paid.
  • List of taxes paid in 2009, including state and local taxes and real estate taxes.
Double check your return. If you elect to file using your own computer, run an error check. This important step really does increase your chances of filing an accurate return. The IRS claims that taxpayers who file online have a reduced error rate: 1% compared to nearly 20% with a paper return.

Make a payment, if necessary. If you owe taxes, you can elect to pay electronically when you file or pay by mail. If you pay by mail, print out a voucher and mail your payment in by April 15; you don't have pay on the same day you file. If you want to guarantee payment on a certain date, you can set up an automatic withdrawal from your bank or pay by credit card.

Collect your refund. If you're owed a refund, you can get your refund in as few as 10 days if you file online and use direct deposit. Your options for direct deposit are better than before -- now you can designate up to three financial accounts to deposit your refund or use your refund to purchase U.S. Series I Savings Bonds.

Check for your acknowledgment. When you e-file, you (or your tax preparer) should receive an acknowledgment within 48 hours that the IRS has accepted or rejected the return; the IRS will explain any errors that caused a rejection and allow you to make corrections and resubmit your return. Traditional paper filers do not receive any acknowledgment.

The IRS expects 2010 to be the most successful online filing season ever, promising faster, more efficient service. IRS Commissioner Doug Shulman urges taxpayers to consider filing their returns online, claiming, "IRS e-file is safe, it's easy and everyone should try it."

Tax Tips for Real Estate Agents and Brokers

Most real estate agents and brokers receive income in the form of commissions from sales transactions. You're generally not considered an employee under federal tax guidelines, but rather a self-employed sole proprietor, even if you're an agent or broker working for a real estate brokerage firm. This self-employed status allows you to deduct many of the expenses you incur in your real estate sales or property management activities. Careful record keeping and knowing your eligible write-offs are key to getting all of the tax deductions you're entitled to.

Read More

Brought to you by TurboTax.com

What is the Educator Expense Tax Deduction?

The Educator Expense Tax Deduction allows teachers and certain academic administrators to deduct a portion of the costs of technology, supplies, and certain training. Here’s what teachers need to know about taking the Educator Expense Deduction on their tax returns.

Read More

Brought to you by TurboTax.com

Self-Employed Less Than a Year? How to Do Your Taxes

Have you been self-employed less than a year? If you’re just starting out, it’s possible you worked at a job earlier in the tax year before making the switch to self-employment, or you’re working multiple jobs. In this case, you may have more than once source of income you’ll need to report on your income tax return.

Read More

Brought to you by TurboTax.com

Taxes for Grads: Do Scholarships Count as Taxable Income?

Heading off to college to broaden your horizons is exciting, but funding your education via scholarships? That's even better. Scholarships often provide a path to education that might not be feasible otherwise, which is why the Internal Revenue Service (IRS) can be generous in minimizing students' tax obligations. But sometimes scholarship money does count as income, and it’s better to find out now if your scholarship adds to your tax liability than to have a surprise later. Here’s how to decode your scholarship taxation.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.