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In the United States, the Internal Revenue Service (IRS) is the revenue service by the federal government. This agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue. The IRS is responsible for collecting taxes and the interpretation and enforcement of the Internal Revenue Code.

It is obvious and essential that you must pay Federal Taxes regardless of where you live in the United States, in accordance with this, most states also have additional state income tax. However, states like Texas, Florida, Nevada, Washington, Wyoming, South Dakota and Alaska have no state income tax. Tennessee and New Hampshire only apply state income tax to interest and dividend income. Each state will collect taxes from you in one way or another. The states that do not charge income tax impose higher rates on the other things like Sales tax or Property tax.

In the year of 1995, the IRS began to use the public Internet for electronic filing. Since the introduction of e-filing, self-paced online tax services have flourished, augmenting and sometimes replacing tax accountants to prepare returns. The IRS would not develop online filing software. For that instance, software vendors would provide free e-filing to most Americans. In 2009, 70% of filers qualified for free electronic filing of federal returns. In 2010, more than 66% (approx 98 million) of tax returns are expected to be filed electronically. Whereas in 2011 the results are higher than the expectation. The reason why the IRS working hard every year to make this process easy, hassle-free and more convenient for the taxpayers to efile their returns. over a period of time the users of online taxpayers are raising slowly and gradually which is a sign of success of IRS for providing the betterment to the taxpayers.

The process of tax preparation is to prepare your Free Tax Filing, often income tax return, often for a person other than the taxpayer, and generally for compensation. It may be done by the taxpayer with or without the help of tax preparation software and online services. Tax preparation may also be done by a licensed professional such as an attorney, certified public accountant or enrolled agent, or by an unlicensed tax preparation business. As United States income tax laws are considered to be complicated, many taxpayers seek outside assistance with taxes.

If you are paying your taxes very first time then it is obvious to arise bunch of questions in your mind about what to do, how to do, etc. There are certain things you need to do before you file your taxes. Filing your taxes does not need to be an intimidating process, you really do not need to worry about a wide variety of forms and tax laws, since computer software can help to simplify the entire process :

# Collect your Tax Documents.
# Determine your AGI.
# Review the Free File FAQs
# Choose your online Tax Assistant
# Efile for Free.
# Use Direct Deposit.
# Pay Electronically.

Every year the tax season arrives rapidly, a large number of people faces preparing their own tax. There are various types of tax deductions, tax credits and new tax laws that make the process complex. It demands accurate calculation and no margin for error makes the difficulty level higher when you are doing your taxes in a traditional way and on your own. There is an easy way for efiling is to choose federal 1040ez form which is the simplest form to efile.

Top 10 Helpful Features on the IRS Website.

Navigate your way through the tax season online and skip waiting in line. All you need is a computer and Internet access because the IRS website has a wealth of free information and online tax support. Here are the top 10 reasons to visit IRS.GOV website.

1. Unlimited access - get answers 24 hours a day, seven days a week If you find yourself working on your tax return over the weekend, there’s no need to wait to get a form or an answer to a question. Visit the IRS website; it's accessible all day, every day.  You'll find answers to many frequently asked questions, and the helpful Interactive Tax Assistant is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions. Much of the website and many forms and publications are also available in Spanish.

2. Use Free File Let Free File do the hard work for you with brand-name tax software or online fill-able forms. It's available exclusively at www.irs.gov. Everyone can find an option to prepare their tax return and e-file it for free. If you made $57,000 or less, you qualify to use Free Tax software offered through a private-public partnership with manufacturers. If you made more or are comfortable preparing your own tax return, there's Free File Fill-able Forms, the electronic versions of IRS paper forms. Visit IRS.GOV/ FreeFile to review your options.

3. Try IRS e-file IRS e-file is the safe, easy and most common way to file a tax return. Last year, 78 percent of taxpayers - 112 million people - used IRS e-file. Many tax preparers are now required to use e-file If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.

4. Check the status of your Tax Refund Whether you chose direct deposit or asked the IRS to mail you a check, you can check the status of your refund through Where’s My Refund?

5. Make payments Electronically You can authorize an electronic funds withdrawal, use a credit or debit card, or enroll in the U.S. Treasury’s Electronic Federal Tax Payment System to pay your federal taxes. Electronic payment options are a convenient, safe and secure way to pay taxes.

6. Find out if you qualify for the Earned Income Tax Credit EITC is a tax credit for many people who earned less than $49,000 in 2011. Find out if you are eligible by answering some questions and providing basic income information using the EITC Assistant.

7. Get tax forms and publications You can view and download tax forms and publications any hour of the day or night.

8. Calculate the right amount of withholding on your W-4 The IRS Withholding Calculator can help ensure you don’t have too much or too little income tax withheld from your pay.

9. Request a payment agreement Paying your taxes in full and on time avoids unnecessary penalties and interest. However, if you cannot pay your balance in full you may be eligible to use the Online Payment Agreement Application to request an installment agreement.

10. Get information about the latest tax law changes Learn about tax law changes that may affect your Tax Return. Special sections of the website highlight changes that affect individual or business taxpayers.

Remember the address of the official IRS website. Don't be confused by Internet sites that end in .com, .net, .org or other designations instead of .gov.

Do I Need to File a Tax Return This Year ?

You are required to file a federal income tax return if your income is above a certain level, which varies depending on your filing status, age and the type of income you receive. However, the Internal Revenue Service reminds taxpayers that some people should file even if they aren't required to because they may get a refund if they had taxes withheld or they may qualify for refundable credits.

To find out if you need to file, check the Individuals section of the Internal Revenue Service website at IRS.GOV or consult the instructions for Form 1040, 1040A or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

Even if you don’t have to file for 2011, here are six reasons why you may want to:

1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.

3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.

5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.

6. Health Coverage Tax Credit Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.

Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.

For more information about filing requirements and your eligibility to receive tax credits, visit IRS.GOV

Prepare and File your Federal Tax Online...

The Internal Revenue Service has developed the service of free online tax which is something that makes the people deliberate about while paying their federal income tax. Some people think that their taxes can be done for free and so many seek tax professionals or CPA to help and guide to prepare federal income tax.

The demand of online tax filing surge dramatically and as a result the companies offering tax preparation rise as well. The main thing for the individuals is the lack of knowledge of the free online tax preparation provided by most of the companies. Whereas not many actually believe that it is quite useful, some feel doing it online helps them as the service charge is still demanded, consequently it can’t be called a totally free tax service.

A number of companies came into existence and present their services to be free, although few pull the wool over your eyes. Whereas few of the companies offer this service totally free of cost. It is quite easy to locate the company which can be most reliable and does all the free tax filling. Looking for such websites of companies can happen to such an issue as everything may not be genuine sites. However, the fact that online taxes are done for free is very much true.

The tax software and the websites do the job of filing the taxes for an individual can be used efficiently. If the software is not available to you for free, then it might be reasonable. Some websites that provide this kind of facility for all the hard-working tax payers are the IRS authorized which offer free online taxes to help the people.
 

Millions of people have started now to use the online services to prepare and file their federal and state taxes. It depends on the individual to use the software or visit the website of the company or hire the CPA to file the taxes. Some people are still using the traditional way of tax preparation as they are not giving details to anyone and scared of identity theft but they must know that these sites are approved by the IRS and are safe and secure for your personal details to disclose.

Federal Tax 1040ez

Every taxpayer wants to have an easy way to prepare and file federal tax return? There is an easy way to get a professional accountant or CPA to complete the task for you but it may be expensive. If you find your tax situation is very complex and confusing then you are having another option to pay your federal taxes on your own by using tax software or by using an IRS authorized website to efile which assist you step-by-step.

Over the period of time the taxpayers' preference have been changed from the old and traditional way of paper filing method, they rely more on preparing and filing income tax online which is easy, fast, convenient and secure. Now when it comes to paying your federal taxes, you can think of using Free File program provided by the IRS which is costs you nothing. Only you have to qualify for it to use this free filing program. If your adjusted gross income is less than $58,000, you can benefit from this free program for doing your federal returns. If you are searching for the options on internet, you will come across a plenty of tax preparation and e-filing websites and companies offering federal tax return help. Therefore, you need to be aware of such tax companies when it comes to choosing a suitable one. The best thing is to check whether the website is IRS approved.

You can prepare Federal Tax 1040ez online with e-filing service provider. They provide you with tax software which is easy to use. It does not require prior tax preparation and e-filing experience. You just have to enter the necessary information into the online tax forms. Your return will be completed as you go through the step by step instructions while using software. Using software, you can easily decide suitable tax credits and tax deductions that can help you save your taxable income. If there are some mistakes, the software will alert you for that so that you can go back and make necessary changes. The most important benefit of filing your online federal tax is, here you get step-by-step help and accurate calculations programmed by the tax software.

Once you complete your return, you can file your federal income tax return electronically where you can get an option of direct deposit if you are expecting refunds. As your e-filed return reaches the Internal Revenue Service, you will get confirmation within 48 hours which let you know that they have received the return file. which is why, online tax preparation gives a peace of mind for all taxpayers who are stressed due to the tax preparation and tax payment during this tax season.

Understanding the importance of Online Tax Preparation :

The whole scenario has been changed ever since the option of online tax filing introduced by the Internal Revenue Service in the United States. The purpose of online tax filing is to simplify the pattern and making it a less complex. To make people aware of the option for filing your income taxes online and saving their time and energy the IRS working hard every year to make this process easy and more convenient. Although there are many people who still prepare and file their taxes in a traditional way by snail mail.

The Advantages of Online Tax Filing :

 Every calendar year, the advantages of online tax filing is getting better and better. The IRS has set up "Free File" program to initiate every individual to pay their relevant taxes online. This program allows individuals who make less than $58,000 a year to file their taxes online free. In other instances, the price of filing online is low as well to attract people for using this mode of filing their federal tax returns and get benefited at the most in the process of tax payment.

Other than the price of online tax filing, you'll find that filing your taxes on your own is much easier with the eFile. You'll simply have to collect your W2s, 1099's and other documents and you're ready to go. Usually, you'll be using tax filing software or web-based programs online. These programs will walk you through the steps, including the forms you will use, like the 1040A or 1040EZ. And if you need help, all you have to do is click a button. Even individuals who have never filed taxes before can quickly fill in the blanks with the step-by-step instructions given.

 If you prefer to file your taxes with an accountant or tax specialist, eFile will come in handy when it comes to receiving with holdings or paying taxes that are due. To use eFile, just tell your tax professional that you'd like to eFile your taxes this year. When you file your federal taxes online, you have the choice of receiving your refund by direct deposit. Simply fill in your routing number and checking account number when asked. The best part is that your money will arrive in about half the time it normally takes. Plus, you can skip the queue at the bank.

 What should be You Need to File Your Taxes Online :

Once you decide to file your taxes via your home computer, you'll need internet access, your social security number, W2s and 1099s and documents for your deductions. You should also have last year's Adjusted Gross Income ready as a security check. Finally, visit the IRS website for a list of sites that offer online tax filing for little or no charge.

Once you choose the right place, just fill in the blanks and select "eFile" when asked. If you choose to receive your refund by direct deposit, have a personal check ready so you can type in your routing and account numbers.

If you choose to have your taxes filed by a tax preparer, bring in all the necessary documents such as your W2's, 1099's, receipts, checking account information (for direct deposit) and last year's tax paperwork. Your tax professional will do the rest. Just remind him or her that you'd like to eFile.

Conclusion :

 It is obvious that with the online tax filing programs the IRS has put in place, there is nothing to lose by filing your taxes online. The most relief is of no risk of mail getting lost and never reaching its destination. Step-by-step instructions will help avoiding the mistakes and help is always available instantly. Not only that but, paying taxes is much easier and receiving a refund is much quicker. You'll save yourself a lot of time and hassle, especially if you usually file taxes on your own. In a Simple way, online tax filing is the new standard for filing your income taxes and to become worry free.