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Friday, January 24, 2003

By Mary Deibel, Scripps Howard News Service

Filing your 2002 taxes is easier -- and cheaper, too.

This year 78 million taxpayers can file free electronically under a new partnership between Uncle Sam and tax software firms.

"No one likes paying taxes ... but Free File makes it easier: Now taxpayers can save time, money and get their refunds in half the time by filing their taxes online for free," acting Treasury Secretary Kenneth Dam said.

The Internal Revenue Service, a division of the U.S. Treasury, has posted companies participating in the Free File Alliance online at www.irs.gov Click on Free File under "Related Resources" to find out how to have your return done and sent to the IRS free.

From there, you're a mouse click away from linking to each company's Web site for eligibility requirements. You can also use the IRS Free File Wizard to see if you qualify for free filing through one or more of the 17 alliance members. Each member sets its own eligibility terms.

But you need to do some figuring in advance, starting with your adjusted gross income. If your 2002 income was about the same as in 2001, IRS officials suggest pulling your 2001 tax return and finding your adjusted gross income, or AGI, on Line 4 of the 1040EZ, Line 8 of the 1040A and Line 33 of the 1040 forms.

E-filers requesting refunds should see the money in their bank account within 10 days if they ask for electronic deposit. If you owe Uncle Sam, you can file now and wait to pay by check, credit card or bank-account debit until the April 15 filing deadline.

One caveat: The Consumer Federation of America and National Consumer Law Center caution against high-priced "refund anticipation loans" and other high-priced products that could be pitched as part of the program. "IRS is connecting taxpayers to commercial tax preparers who are free to charge triple-digit interest rates for 'instant' refund loans and extra fees for other services," warns law center director Chi Chi Woo.

These Free File Alliance members will prepare and file income tax returns free for taxpayers who meet the following eligibility criteria:

CCH Inc. (Complete tax) .............. AGI of $33,000 or less

TaxSlayer ............................ All active-duty military, and taxpayers with AGI of $30,000 or less

H&R Block ............................ AGI of $28,000 or less

Tax$imple ............................ AGI of $28,000 or less

Free 1040 Tax Returns ................ AGI of $25,000 or less

FreeTaxReturns.com Inc.................AGI of $28,000 or less

1 Discount Tax Return Service ....... AGI of $27,500 or less

Efile Tax Returns Inc. ............... AGI of $28,000 or less

taxEngine.com ........................ AGI of $9,200 or less

Intuit (TurboTax) .................... taxpayers who get the Earned Income Credit or AGI of $27,000 or less

2nd Story Software Inc ............... 1040EZ filers and taxpayers with $100,000 or more

EzTaxReturn.com ...................... 1040EZ filers and taxpayers with $25,000 or less AGI

my1040EZ.com (Freetax USA) ........... taxpayers 20 or younger and 45 or older

TaxBrain ............................. taxpayers 50 or older and taxpayers with AGI of $12,000 or less

FileYourTaxes.com .................... Wisconsin, Michigan, Arizona and Georgia residents

OnLine Taxes Inc. .................... taxpayers 20 or younger

C&S Technologies (eSmartTax) ......... Illinois and New York residents

Source: Internal Revenue Service; as of Jan. 16, 2003.

(Contact Mary Deibel at DeibelM@SHNS.com or online at http://www.shns.com)