Can you use Free File?

I'm a bit baffled by the IRS statement that any household with adjusted gross income of $52,000 or less can use its Free File service. The agency's Free File web page links you to for-profit companies that will let you use their software to prepare and electronically file your 2006 federal return free. The IRS estimates that 70 percent of taxpayers are eligible.

But how, without preparing your taxes, would you know your adjusted gross income (AGI to the cognoscenti) is $52,000 or less?

I guess the easiest way is to use your 2005 tax return and extrapolate based on changes for 2006. If you know you're way above that amount, you won't bother with the exercise. If you know you're below, just enter Free File and have at it. If you're close to the cutoff AGI, you may have to slog through the software to find out if you can file free. Bummer.

For more details on using Free File, check out our story, "Tax prep that won't overtax you."

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Even if you don't use Free File, I recommend e-filing. The IRS recently reported that e-filing of federal taxes is up more than 8 percent from the same time last year, to more than 16 million returns. Time was, most e-filers were early birds expecting refunds. But the agency says there's a trend now for later filers to e-file in place of big, fat paper mailings.

I'd wager that what most people like about e-filing is the quick refund. If you give the IRS your bank account and routing number for direct deposit, you can generally expect a refund within two weeks. There's also the reduced likelihood the IRS will make inputting errors from your form, which cuts down on potential audits. You get an e-mail confirmation when the IRS gets your returns. It's wonderfully efficient.

I got my confirmations yesterday. In a perverse way, I'm relieved to know the IRS has my stuff. I know I won't feel the same when, on April 17, the agency removes more than $2,000 in taxes owed from my bank account.

There's that efficiency again. But not so wonderful.