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Hoosier Taxpayers Find Electronic Filing a Time-saving Convenience During Tax Season

Electronic filing is on the rise in Indiana. Currently, more than 1.8 million - 74 percent - of Hoosier taxpayers have chosen the convenience of filing their tax returns electronically, and as a result many are reaping the rewards of more accurate returns and faster refunds.

"Since 2004, we've seen electronic filing increase by more than 30 percent," said Stephanie McFarland, director of public relations for the Indiana Department of Revenue. "I-File, in particular, has really taken off, with a 51-percent increase in usage over the past three years."

I-File is the state's own fast, friendly and free online filing tool for individual income taxes.

The Department of Revenue encourages electronic filing for several reasons. First and foremost is accuracy. "Electronic returns are 98 percent accurate," said Karen Barthelmes, DOR quality-assurance coordinator. "However, up to 20 percent of paper-filed returns can have errors."

Erroneous returns delay refunds to eager taxpayers, and cost the state approximately $3 per return to process. But an electronic return costs only about 4 cents to process. In addition, refunds from electronic returns are issued in seven to 14 days, on average, whereas a refund from a paper return can take six to 12 weeks. This year the Department is issuing refunds from electronic returns in an average of four days.

One reason for the significant difference in refund delivery between a paper return and an electronic return is the amount of handling and work involved. "A return that's filed electronically goes straight into our system, is checked automatically, and processed almost instantaneously," said Barthelmes. "But a paper return has to be opened by someone, reviewed by hand, refigured to ensure the calculations are correct, and then sent for additional processing to get into the system. The refund process can't even begin until the paper return has been through these additional steps."

Online tools like I-File and the fed/state program contribute to greater accuracy by ensuring taxpayers' returns align with new and amended tax laws, and check math calculations as the return is completed. I-File will even select the proper form for the taxpayer.

Since 2006 the Department of Revenue has conducted customer-satisfaction surveys among thousands of I-File users to determine how well the state's program works for them. "We're getting consistent results, and good feedback that has helped us make further improvements each year," said McFarland.

In fact, in 2006 and 2007, more than 96 percent of survey respondents indicated they would recommend I-File to a friend or family member, and a consistent 94 percent each year have indicated they are satisfied or very satisfied with the online tool.

"I-File is a hit with taxpayers because of the range of ease and benefits it provides," said Barthelmes. "Most people are able to complete their returns in 15 to 30 minutes and it's great for late filers."

To date, more than 80,000 taxpayers have used I-File this filing season, compared with 60,000 at the same time last year. To use I-File, visit http://www.ifile.in.gov/

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