The IRS is aggressively pushing to make more of its information available via the Internet. To see what you can do with the IRS online, check out its website at www.irs.gov. You'll see a number of services listed on its main screen, but here are a few highlights.
IRS Free File
Free File provides free online tax preparation and electronic filing for qualifying taxpayers through a partnership between the IRS and the Free File Alliance, LLC. 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 qualify for free e-filing, you must meet certain requirements -- generally, your income must be about $50,000 or less, although each company writes its own rules. Bear in mind that you may still have to pay for filing your state income tax return.
Free e-filing will put your personal information in these companies' databases, which might lead them to pitch you other not-so-free services. But if you don't mind that potential inconvenience, Free File is an easy and inexpensive way to complete your tax return. Just make sure to choose a company using the link provided on the IRS's site; if you go directly to a tax-prep company's website, you may not get the free offer.
Where's my refund?
Suppose that 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 refund amount to get an update on its progress. (It's a good idea to have a copy of your tax return handy when you check.) Online tracking sure beats the lengthy hold times and complicated keypad-pressing of the old check-by-phone method.
Employee identification number application
Have you 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) to open your bank accounts and/or begin your payroll processing. It used to be a painful and time-consuming process -- but not anymore. Simply complete your SS-4 application online, and you'll receive your provisional EIN in seconds. It's beautiful, and it's been a real boon for accounting and tax pros making applications on behalf of their clients.
Withholding calculator
If you've filed your return only to find that you owe Uncle Sam a pretty penny, you'll probably want to avoid that hefty debt the next time around. Alternately, if you find that your refund is much too large, you might prefer to keep that money in your pocket throughout the year. If you want to adjust your withholding status for your wages for the current year, you can do so online. The IRS offers official forms, instructions, and a withholding calculator. It's not for everybody, especially if you have a complicated income situation, but if you (and/or your spouse) work for wages, it's for you.
The Electronic Federal Tax Payment System (EFTPS)
Business owners should check this out, especially if you prepare your own payroll and pay your own business payroll taxes. You no longer have to worry about losing an IRS payment check in the mail, or not getting to your bank on time, and getting socked with a penalty. You can stop all the madness and ensure regular, on-time payments by simply enrolling in the Electronic Federal Tax Payment System (EFTPS). 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 apply for the EFTPS, you also have options to pay by credit card. Check out the Official Payments Corporation for more information.
Just the tip of the iceberg
On the IRS website, you'll find 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. It might make your tax life just a little bit easier.
When he's not dealing with tax issues, Roy Lewis is a motivational speaker who lives in a trailer down by the river. He understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, so 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.
