IRS Commissioner Doug Shulman recommends taxpayers consider e-file this year as the best option to file accurate tax returns and receive fast refunds. The e-file program includes new improvements to the Free File program that will allow nearly all taxpayers to e-file for free.

Doug Shulman
IRS Commissioner

"These are tough times, and e-file is the best way for people to get cash in their pocket quickly," said IRS Commissioner Doug Shulman.

"Filing electronically with direct deposit can get refunds to taxpayers in as few as 10 days. Combined with important changes in the Free File program, we believe e-file is a better option than ever before for the nation’s taxpayers."

The new Free File Fillable Tax Forms allows taxpayers to fill out and file their tax forms electronically, just as they would appear on paper. The option does not include an interview process like other Free File offerings. The IRS says the new service is for those who are comfortable with the tax law, know what forms they want to use and don’t need help completing their returns.

IRS e-file allows taxpayers to file their returns now and pay later if they owe taxes. It allows taxpayers to file both federal and most state returns at the same time.

The IRS e-file totaled nearly 90 million tax returns in 2008. Almost 58 percent of all returns were filed electronically and the average refund was $2,429.
 

Forty percent plan to file online, up from 34 percent three years ago. More than two-thirds of taxpayers said they have filed online for three years or more, up from 55 percent in 2005.

"Given the many online tax filing alternatives and payment options, such as IRS E-file, Free File and direct deposit options, it’s not surprising that every year an increasing number of consumers are filing electronically," says Lynn Franco, Director of The Conference Board Consumer Research Center. "And, once they file online, they tend to stay online." 
 
More people are comfortable filing their taxes online, compared to other financial transactions. The survey found that half are "extremely concerned" when banking or paying bills online, but only 44 percent feel the same way about filing taxes online.

The percentage of Internet users who are filing their federal taxes offline has decreased over the past several years as more people are choosing to file online. The most common reason for not filing online is that people do not prepare their own taxes or they are concerned about sending personal information over the Internet.

Among people who plan on filing their taxes online, over 40 percent will use a professional service, with women more likely than men to use a professional service. The second most popular method favored by one-third of online filers, is do-it-yourself software. Male filers are more likely than female filers to use tax software.