For the taxpayer on the go trying to file a return quickly and easily, there’s an app for it.
“We’re trying to anticipate and follow trends you see in the real world,” said Bob Meighan, a vice president at TurboTax.
And the trend is mobile, from smart phones to tablets. “People want simple solutions,” he said.
Taxes-on-the-go applications are a natural next step to the explosion in electronic filing. TurboTax has SnapTax, which allows those filing the simplest tax form ? 1040EZ ? to file directly from their iPhone or android. Similarly, H&R Block has H&R Block At Home for filing simple returns via those smart phones.
The IRS says the typical 1040EZ filer is a wage earner who has income of less than $100,000, is under 65, and doesn’t have kids, own a home, or qualify for most other deductions or credits.
Meighan said about 24 million people file the 1040EZ. “You can literally do your return in 10 or 15 minutes max,” he said.
Taxpayers can use smart phones to take pictures of documents like the W-2 form, and an optical reader in the application imports the photos into the tax forms.
Both companies allow you to download the applications for free, but there’s a cost for filing.
“We take away the barrier of entry, provide confidence along the way and provide support along the way,” said Gene King, spokesman for H&R Block. He said the company also offers audit protection for filers using the smart phone app.
What if you lose your phone?
“People should always be concerned about security,” Meighan said. “We’ve done the work to mitigate your file being compromised.”
For one thing, he said, the data is encrypted and stored on the TurboTax server, not on the phone. Within an hour, if the data is not saved or accessed, the application deletes it.
The Internal Revenue Service also has an application for iPhones and androids, IRS2Go, that lets taxpayers check on the status of refunds and get tips. It can’t be used to actually file a return. A report by the Inspector General for Tax Administration said that for security reasons, taxpayers should only download the application from the Apple App store or the Android Market.
IRS spokesman Terry Lemons said an update to the IRS app later this year will link to the agency’s YouTube videos and give taxpayer tips. “We’re never going to challenge Angry Birds for downloads but we got a pretty good response last year,” he said.
H&R Block and TurboTax also have iPad applications that enable taxpayers to file more complicated returns, similar to how they might do it using a home computer.
More than 112 million tax returns were filed electronically last year, the IRS said, up 13.7 percent from the previous year.
Electronic filing can speed the processing of your tax return. And, if you choose direct deposit, you’ll get your refund much more quickly, in as few as 10 days, the IRS says.
The agency also cites an error rate of just 1 percent for electronically filed returns, compared with 20 percent for paper returns.
Taxpayers with adjusted gross incomes under $57,000 can electronically file for free through the IRS website www.freefile.irs.gov . The agency has agreements with tax preparation companies to provide the service, and you can choose which one you would like to use.
If your income is higher than that threshold, the agency provides on its website Fillable Forms, which do basic math calculations and allow you to file electronically. No support is provided with the Fillable Forms, nor are state returns included. The IRS calls it “the simple electronic equivalent of paper forms.”
Lemons said he expects the number of returns filed electronically to continue to rise.
In a November report, the Treasury Inspector General for Tax Administration called on the IRS to improve the way it tracks performance and security issues in its new e-filing system, scheduled to be fully in place by 2013.
“Since a growing number of Americans are filing their returns electronically, there is no room for error in IRS computer systems,” J. Russell George, the inspector general, said in a statement. “The IRS must be relentless in its pursuit of excellence with regard to all aspects of the Modernized e-file system.”
The IRS responded that it addresses any security weaknesses immediately.
IRS page on 1040EZ: http://www.irs.gov/instructions/i1040ez/ar02.html#d0e448
Carole Feldman can be followed on Twitter at http://twitter.com/CaroleFeldman