Saturday, February 8, 2003

IRS boosts Free File initiative

In Tristate, most folks can benefit

By Amy Higgins
The Cincinnati Enquirer

Thanks to a new IRS initiative, most Greater Cincinnatians can file their federal income taxes online this year for free.

Visit Cincinnati.Com from 11 a.m.-noon today, Feb. 22 and March 8 for our third annual series of Tax Chats. Questions will be answered live by Tom Cooney and Crystal Faulkner, partners in the accounting firm of Cooney, Faulkner and Stevens.
Saturday: Getting your records organized
Sunday: What's new for 2002
Monday: Often missed work-related deductions
Tuesday: Does it make sense to deduct a home office?
Wednesday: Education related credits and deductions
Thursday: Reducing taxes without itemizing
Friday: Which filing status is best?
Today: IRS Free File

Questions: E-mail questions throughout the week to Answers to commonly asked questions will be printed in Saturday editions of the Enquirer through April 12.
But a small number of people in Kentucky and Indiana won't get to benefit from the IRS Free File program - a technology initiative designed to get taxpayers filing electronically.

In years past, taxpayers could buy software off a shelf or pay a professional preparer to file their 1040s electronically. Filing papers filled out manually has always been free, but problematic for the IRS because 20 percent have errors, IRS spokesman Chris Kerns said.

Filing electronically cuts down on errors, as well as cutting the time it takes to receive a refund from six weeks to two.

"The big message around e-file is you're going to get your refund faster," said Terry Lutes, director of electronic tax administration for the IRS. "It's easy, fast and secure."

Hoping to lure more taxpayers to the more efficient e-file system, the IRS contracted with 17 tax-preparation companies to make a range of online services available to at least 60 percent of - or 78 million - American taxpayers.

But some taxpayers are already complaining about how to choose the right system. Each of the 17 companies has its own criteria for who is eligible for its Free File services.

A "wizard" at the IRS Web site ( helps taxpayers whittle their choices - but be warned that some services are still changing their eligibility criteria.

Also still, a number of middle-class Americans don't qualify.

Some vendors offer Free File to those making under $40,000. Others serve people making more than $50,000. Others file taxes for people under 20 or over 50 or in the active military.

One serves all Ohio residents - leaving 21- to 49-year-old civilians in Kentucky and Indiana making between $40,000 and $50,000 out in the cold.

Each Web service also varies on whether they offer state tax filing and for how much. Typically, there is an extra fee to file state income tax forms. is the service that offers free federal filing to every Ohio resident. Filing an Ohio state income tax form with the federal 1040 costs $7 to $10.


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