HOUSTON BUSINESS REVIEW

THE CPA CORNER: FREE FEDERAL TAX FILING IN 2005
By C. Kevin Moore

Kevin Moore is a Principal of C. Kevin Moore & Associates and has two decades of experience as a Certified Public Accountant. Each week he provides the information you need to grow and protect your business.

If you have access to a computer and the Internet you may be eligible to prepare and file your 2004 federal tax return electronically — for free. The IRS and the Free File Alliance, a private-sector consortium of tax software companies, continue their partnership to help taxpayers electronically prepare and file their federal tax returns for free. For 2005, any taxpayer with access to a computer and the Internet will qualify for Free File. Each company sets its own criteria for free usage. The criteria varies but often is based on income, state residency and age. Some companies have no restrictions for participation.

Filing electronically is fast, accurate and secure. People who file electronically generally get their refunds more quickly than those who file paper returns. The software eliminates most common errors, such as math errors, that can hold up a refund. You will also get an acknowledgment of receipt of your electronically filed return from the IRS. In 2004, more than 61 million taxpayers filed their tax returns electronically.

Anyone who wishes to check into free filing should take the following steps: The Free File Web page lists the Free File Alliance members and their free services. When selecting a company for the first time, make certain that you access the company's Web site through the IRS Web site. If you choose to access the company's Web site directly, even if you qualify for their free offer, you may not remain eligible for the free service. After you enter a company’s free file site from IRS.gov site for the first time, you will remain eligible for the company's free offer even if you return from another Web site or URL. At the Free File page, you can browse the summary of each Alliance member's offering or use the interactive tool, “Guide me to a Service” to narrow down the possible companies offering free preparation. "Guide me to a Service” will seek to match you to those Free File Alliance members for whose services you may qualify. The accuracy of results depends on the accuracy of the information that you provide.

Prepare and File Tax Return

You can prepare your tax return using the member's online proprietary software. Completed tax returns will be sent electronically from the Alliance member to the IRS through IRS's existing e-file system using secure telephone lines. You will receive an acknowledgement of receipt or rejection of the return via an e-mail from the Alliance member. Take advantage of this free opportunity.