File Taxes Online

Just last week, the IRS announced that Free File is officially open for business for the 2010 tax season. No matter what your filing status or income level, you can use Free File.

The most commonly-touted services under Free File are tax preparation software packages, the product of a public-private partnership between the IRS and the Free File Alliance, LLC. You can read more about the services and the partnership (including a list of the tax preparation software providers) at www.irs.gov/freefile. Under the partnership, at least 70% of taxpayers are eligible to use the software to file federal income tax returns for free.

Filing your taxes doesn't have to break the bank. You can take advantage of a number of free filing and assistance options available this season:

Paper Returns. If you're a taxpayer with a simple return -- or just a traditionalist at heart -- you can complete a paper return. Beginning in 2011, paper tax forms will no longer be mailed out automatically. If you filed by paper in 2010 without the aid of a paid preparer or tax software, you should have received a postcard in early October 2010 explaining how to get the tax forms and instructions for your 2010 return.

To order a free paper tax form by phone, call 1-800-829-3676.

You can order up to 10 different forms online to be delivered by U.S. mail. You'll receive two copies of any form you order; instructions are automatically included with your order. Normally, you should allow seven to 15 days for processing and delivery, but if you order in January, expect delays.

If you need forms immediately, you can download tax forms and instructions for free from the IRS website.

IRS e-file for the 2010 tax season will officially open for business on Jan. 14, 2011. Take note, however, that due to the last-minute tax deal in the form of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, tax season might start a little later for some taxpayers.

Taxpayers who intend to claim the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction -- and those taxpayers who itemize deductions on a federal form 1040 schedule A -- will need to wait until the IRS is ready to process those new returns; which the agency estimates will be in mid to late February.

Nine in 10 retailers are expected to offer online deals today, Cyber Monday, according to the National Retail Federation. Those deals are expected to push online sales to $32 billion during the holiday season, up more than 10% from last year.

Numbers like these should have retailers salivating, and encourage state and local governments hoping to fill some gaping holes in their budgets caused by revenue shortages from the past few years.

Forty-five states rely on sales taxes on goods and services as part of their annual state budgets; the exceptions are Alaska, Delaware, Montana, New Hampshire and Oregon. Rates range from 4% to 8.25% at the state level, with local additions boosting rates to over 10% in some municipalities. That should translate into a combined boost of over $1 billion in sales taxes for those states that do charge sales taxes -- not a bad haul by any standards.

Taxpayers using the federal government's e-file system can get their cash refunds within 10 days, or nearly as quickly as the short-term loans offered by some tax preparers that cost up to 25 percent of the proceeds. So take that, H&R Block and Jackson Hewitt!

Anyone with an adjusted gross income of $57,000 or less can use the FREE online tax preparation site maintained by the Internal Revenue Service. That's about 70 percent of all U.S. filers, according to the IRS.

The agency can process a return and issue a refund within 10 days, Commissioner Doug Shulman says. That's down from as long as 8 weeks in prior years.

"Refund Anticipation Loans are often targeted at lower-income taxpayers," Shulman said. "With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash."

So next time tax season rolls around, use the IRS website to file and get some cold, hard cash delivered quickly to your bank account without paying high fees for a short-term loan.

A number of U.S. states hope to balance their budgets by allowing gambling, then taxing it. But that's a gamble in its own right; in light of new industry reports, these states could be in for a big disappointment -- as the gaming industry has been hard hit by the recession.

States such as Ohio, New York, and Massachusetts are adding casinos and "racinos" (horse race tracks with slot machines, and, in some states, table games such as poker). These will join an existing 443 commercial casinos, 456 Native American ones, 44 racinos, 588 card rooms and 11,215 electronic gaming devices sites. Overall, in the U.S. about 833,000 slot machines operate today.

Congress, which is trying to find money by looking under the sofa cushions, has resurrected a plan to require Internet shoppers to pay state and local sales taxes.

The bill, dubbed the Main Street Fairness Act, was explained thoroughly earlier this month by Walletpop Blogger Josh Smith. In short, the measure was introduced by Rep. Bill Delahunt, a Taxachusetts Democrat, who argues that it is unfair to local businesses that online businesses escape paying sales tax.

The history of the battle over taxes goes back to a court ruling in 1992 when the Supreme Court confirmed that it was indeed too onerous and costly for businesses to calculate state and local taxes because they vary so much from state to state.

With casinos sprouting like kudzu across the U.S., many states are looking to gaming taxes to help fill the hole poked in their budgets by the recession. Now, the federal government has raised the stakes by taking the first step toward legalizing online gambling.

According to Bloomberg Businessweek, the House Financial Services Committee has approved a bill that would allow Internet gaming to be offered by companies licensed by the Treasury Department. The companies will be required to operate from U.S. soil.

Another measure, yet to be passed by the House Ways & Means Committee, would tax online gambling, which could bring in as much as $42 billion in revenue over the next decade. The money would be split between the federal (25%) and state governments (75%).

To the tune of "Shaft" played by the Columbia University marching band, dozens of income-tax filers raced up the steps of New York City's main post office Thursday near midnight. The deadline that so many Americans dread had arrived.

Inside, hundreds fidgeted in line and scribbled on forms and checks wherever they could find a flat surface. It was a moment played out in post offices across the country. About 20% of taxpayers submit their returns within the last two weeks, the IRS estimates. Anthony Diaz was proud to occupy the extremely late end of that bunch.

Most Americans will be expecting to get a nice check from the IRS in the near future as the mad rush to file taxes ends in less than a week. After you file, there are several ways to check the status of your tax refund by visiting the IRS Web site or calling its hotline; but if you'd prefer to check it from your iPhone or iPad you can do that, too. The new MyTaxRefund app from TurboTax is a free app that will allow you to track the status of your return much like you'd track a package.

The new tool only works for individuals who e-file their taxes. It only takes a few seconds to use. All you need to do to track the status of your tax refund from the iPhone is install the MyTaxRefund app, answer two questions and you'll have the current status of your tax refund. You don't need to file using TurboTax to track your refund status with this app.