Free Federal Tax Filling

Free File is the fast, easy, and free way to prepare and e-file your federal taxes online.
The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance LLC, a group of private sector tax software companies.

E –file your federal taxes – With the help of tax software:

• Free File supports preparation of Federal tax returns. However, many companies also offer state tax preparation though fees may apply.
• Free tax preparation and e-filing if your adjusted gross income is $56,000 or less in 2008.
• Asks simple questions, puts your answers on the right forms.
• Covers the most commonly filed Federal tax forms and schedules.
• Includes Federal e-file - get your refund in as little as 10 days with Direct Deposit.
• Does all the math or you.
• Receive a quick confirmation within 48 hours that your return was received by the IRS.
• Benefit from Free File's checks for accuracy.
• Available in Spanish.

E –file your federal taxes – fill in the tax forms and file them online without tax software:

• Looks like blank IRS forms. You choose, self-prepare, and e-file your 1040, 1040 A and 1040EZ return.
• Covers the most commonly filed Federal tax forms and schedules.
• Includes basic calculation capability.
• Does NOT support state forms or State e-file.
• There are no income limitations.

Estate Tax

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans.

Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; and $3,500,000 effective for decedents dying on or after January 1, 2009.

Source from http://www.irs.gov/

E-File, E-Pay and Direct Deposit

This year, electronic filing options will speed the payment of refunds to millions of taxpayers. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to approximately six weeks for people who file a paper return and get a traditional paper check.

This year, taxpayers can begin filing electronically on Jan. 16.

The IRS in 2009 is again offering free tax preparation and filing through the Free File program. Anyone with an adjusted gross income up to $56,000 can use the standard Free File options this year – that is approximately 98 million Americans. The program also has usability improvements, including a standardized set of electronic forms that are most frequently used by Free File-eligible taxpayers.

This year the IRS and its partners are offering a new option, Free File Fillable Tax Forms, that opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Free File Fillable Tax Forms allows taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an “interview” process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for recordkeeping and e-file their returns. It may be just right for those who are comfortable with the tax law or those who use electronic software to prepare their returns but file using paper forms.

Both the fillable-forms option and the previously available Free File offerings are available only through the IRS.gov Web site. More information will be available in mid-January

Filling Requirements for E-file Your Tax Return

Filling Requirement is differing from case to case and dependent on status if you are individuals, business, partnership firm, Small Corporation, or Corporation.

For An Individual:

If you are individual and wish to e-file tax return than you need to have following tax related documents with you.

• A copy of last year’s tax return
• Personal identification (driver's license, social security card) for you and your spouse, if applicable, showing the SSN(s)
• The social security cards of your dependents, if applicable
• The social security cards of your dependents, if applicable
• Forms 1099 showing dividends and interest paid to you throughout the year.
• Form 1099-G showing any refund, credit or offset of state and local taxes.
• All receipts pertaining to your small business
• Forms 1099-DIV, 1099-R
• Income receipts from rental real estate, royalties, partnerships, s corporation, trusts
• Unemployment Compensation
• Social security benefits
• Other Income
Itemized Deductions (Schedule A)
• Medical and Dental expenses
• Receipts from taxes you paid such as state and local taxes, real estate taxes, personal property taxes.
• Form 1098 for home mortgage interest and points
• Receipts for charitable contributions and gifts
• Casualty and theft losses
• Job expenses
For Paper Return:

FORM 1040 Requirements:

If you are filing a federal income tax return on paper, use the simplest form you can, the IRS advises. Prefer simpler form so that the less chance of an error that may cost you money or delay the processing of your return. The simplest is Form 1040EZ. Form 1040A covers several additional items not addressed by the EZ. Form 1040 should be used when itemizing deductions and reporting more complex investments and other income. Beginning in 2004, the income limit for using Forms 1040EZ and 1040A has increased to taxable income of less than $100, 000, up from previous years' limit of less than $50,000.

Forms - To Use/ Applicable

• 1040EZ

o Taxable income below $100,000
o Single or Married Filing Jointly
o Under age 65
o No dependents
o Interest income of $1,500 or less

• 1040A

o Taxable income below $100,000
o Capital gain distributions, but no other capital gains or losses
o Only tax credits for child, education, earned income, child and dependent care expenses, adoption, elderly and retirement savings contributions
o Only deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees
o No itemized deductions

• 1040

o Taxable income of $100,000 or more
o Itemized deductions
o Self-employment income
o Income from sale of property
If you cannot use either a 1040EZ or 1040A, you probably need a regular 1040. You can use the 1040 to report all types of income, deductions, and credits. You may have been mailed a 1040A or 1040EZ tax package this year based on the return you filed last year. If your situation has changed this year, it may be to your advantage to file a 1040 instead. For example, you may pay less tax by filing a 1040 because you have enough deductions to itemize this year.

General Information:

You can use Form 1040EZ if all of the following conditions are satisfied:
• Filing status is single or married filing jointly.
• You do not claim any dependents.
• You do not claim a deduction for Educator expense, the student loan interest deduction, or the tuition and fees deduction.
• You do not claim an education credit, the retirement savings contributions credit, or the health insurance credit for eligible recipients.
• You (and your spouse if filing a joint return) were under age 65 and not blind at the end of 2002.
• Your taxable income is less than $50,000.
• You had only wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund Dividends, and your taxable interest was not over $1,500.
• You did not receive any advance earned income credit payments.
• You do not owe any household employment taxes on wages you paid to a household employee.
• No itemized deductions.