IRS LIKES ELECTRONIC TAX FILING

WASHINGTON - Spending an extra $30 or so can get you a federal tax refund in three weeks or less.

That money will buy you the services of an electronic return filer - an accountant, tax-return preparer, bank or other institution that can transmit your completed tax forms via telephone line. In most cases, the electronic filer will fill out your return for another fee or transmit one you have completed yourself.

Regardless of who does the calculations, the Internal Revenue Service says that within three weeks after your electronic return is received, your refund check will be in the mail. That is about half the time required for old-fashioned paper returns filed early in the year.

You may be able to get the money within two weeks by opting to have the refund from your electronic return deposited directly into your checking or savings account.

The IRS likes electronic filing because it cuts down on errors, paperwork and processing time. A year ago, 2 million electronic returns were predicted, but 4.2 million eventually were filed. This year, the IRS is predicting 6 million couples and individuals will file electronically.

In fact, the system has become so successful that the IRS no longer offers to provide callers a list of area businesses that will transmit returns. The agency suggests you check advertisements or ask friends for recommendations.

Electronic filing is available for most people who expect a refund whether they file Form 1040EZ, 1040A or the long form, 1040. Since you cannot sign an electronic return, you must sign a Form 8453, which the electronic transmitter will mail to the IRS.

Is electronic filing worth the price? That depends on how quickly you need the money. The average refund this year will be in the neighborhood of $900; the question is whether you want to give someone 3 percent or so of your refund just to transmit your return when you could mail it for 25 cents.

If you go electronic, a three-week refund might not be quick enough for you. Some electronic filers offer refund-anticipation loans, giving you a refund on the spot. But many of these loans are at interest rates higher than you would pay on a credit-card purchase.