The IRS is pushing hard to provide more information and contact via the Internet. It's an aggressive program, and the IRS feels that building this infrastructure will benefit not only the IRS but also taxpayers and tax preparers.
What can you do with the IRS through the Internet? First, check out the IRS website at www.irs.gov. You'll see a number of services right there on the main screen. Here are the highlights.
IRS Free File
Free File is online tax preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC. In other words, you can e-file free if you qualify. There are currently about 15 tax preparation companies in this alliance, including such big names as H&R Block (NYSE:HRB) and Intuit's (Nasdaq: INTU) TurboTax. To be eligible to file electronically for free, you must meet certain requirements -- generally, your income must be about $30,000 or below, though each company writes its own rules -- and you may have to pay for filing your state income tax return.
Obviously, these companies will have your information in their databases and might hit you up with other services (for which you might be charged). But if you don't mind that potential inconvenience, this is an easy and inexpensive way to have your tax return completed. Just make sure to choose a company by using the link provided on www.IRS.gov. By going directly to a company's website, you may not get the free offer.
Where's my refund?
You've already filed your return, electronically or otherwise, and believe that your refund is long overdue. You can now track it on the IRS website. You'll need to know your Social Security number, filing status, and amount of the refund in order to receive the information about your refund (have a copy of your tax return in front of you so you'll have that information at your fingertips). It sure beats the heck out of the way it was done "back in the day" when you called a telephone number and stayed on hold, or had to punch a bunch of numbers into your telephone keypad.
Employee identification number application
Started a new business? Hired employees in an existing business? Started a trust? Created a pension plan? Then you'll likely need an employee identification number (EIN) in order to open your bank accounts and/or begin your payroll processing. It used to be a painful and time-consuming process. No longer. You simply complete your SS-4 application online, and you receive your provisional EIN in just a matter of seconds. It's beautiful and has been a real boon for accounting and tax pros making applications on behalf of their clients.
Withholding calculator
You filed your return and find that you owe Uncle Sam a pretty penny. You want to make sure that it doesn't happen again in the future. Or, alternatively, you find that your refund is much too large and you'd rather have that money in your pocket throughout the year. For whatever reason, you want to change your withholding status for your wages for the current year. You can do that online, using official IRS forms, instructions, and withholding calculator. It's not for everybody, especially if you have a complicated situation, but if you (and/or your spouse) work for wages, it's for you.
The Electronic Federal Tax Payment System (EFTPS)
If you're in business, this is something that you should take a look at, especially if you're preparing your own payroll and paying your own business payroll taxes. You no longer have to worry about an IRS payment check getting lost in the mail and getting socked with a penalty. Gone are the days of getting to your bank right after closing time, knowing that a late payroll tax deposit penalty will be heading your way. You can stop all the madness by simply enrolling in the Electronic Federal Tax Payment System (EFTPS). It's an easy way to make sure that all of your payments are made on time. The EFTPS service is also available for individuals, and you can apply online at www.eftps.gov.
Paying taxes electronically
If your individual tax balance due is just a "one shot" thing, or you don't want to go through the process of the EFTPS application, and you want to use a credit card to make your tax payment, you also have options. You can check out Official Payments Corporation to make your tax payments via credit card.
Just the tip of the iceberg
You can visit the IRS website and download publications, regulations, forms, instructions, questions and answers on many tax topics, general information, and even IRS statistics. The IRS has taken great strides to provide electronic products and services to taxpayers and tax pros. So make sure to check out the IRS website and see what's available for you to make your tax life just a little bit easier.
This article was originally published on Feb. 13, 2004. It has been updated.
Roy Lewis lives in a trailer down by the river and is a motivational speaker when not dealing with tax issues, and he understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.
