Filing Taxes Using E-file 2006

Anyone that hasn't tried e-file yet is in a shrinking minority.  According to statistics recently released by the IRS, electronically filed tax returns continue to grow in popularity, as well as the use of home computers to file those returns.

e-File Statistics

In its first release of tax filing statistics for 2006, the IRS found that as of March 3, more than 39 million taxpayers e-filed their return.  The IRS also found the use of home computers to prepare and file taxes was up 16.5%; while e-filing through tax professionals is up closer to 4%.

Even more intriguing is the use of e-file to replace paper tax forms.  As of March, 73% of the total returns received by the IRS were filed electronically.

E-filing with Credit Cards and Direct Deposit

The IRS report also indicates that taxpayers are embracing other electronic means to aid them in the process of filing their taxes.  This includes the widespread acceptance of direct deposit for tax refunds, and credit cards to pay taxes owed.  In particular:

  • Nearly 34 million individual income tax refunds were directly deposited into bank accounts.  This represents 76% of all tax refunds processed in 2006.
  • Nearly 630,000 credit card payments were made by taxpayers so far in 2006.  That's an increase of 41% over the same period last year.
  • The total payments charged to credit cards increased 48% to over $350 million, which is an average of just over $560 per taxpayer using a credit card to pay money owed.

E-filing Taxes

E-filing a tax return is not just convenient; it's a structured process that can save time and money by walking taxpayers through forms as well as finding hidden tax deductions.  Best of all, it's even possible to e-file a tax return for free.

Anyone that wants to learn more about e-filing their return should check out our article on e-file hints.  It's also possible to find a complete listing of free e-file providers by visiting the IRS Free File website.

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