New Study Shows Number of E-Filers Up 300%

A revealing study by Forrester Research shows that an estimated 6 million households will file tax returns online this spring. The number represents a 4 million or 300 percent increase over last year.

The increase in online filers is attributed to the increase in readily available online tax filing services, the ease of tax software programs, and a growing comfort level toward electronic filing. Although 6 million e-filed returns is still a long way from the 115+ million tax returns that will be filed this year, Forrester estimates that 80% of tax filing will be done online by 2007.

The Forrester report on this study describes the different types of people who use online tax filing services. Previously people generally fell into one of two groups - soloists who file their own taxes online, and delegators who hire professionals to e-file their taxes. A new group is now taking form - validators - a group described as people who want to prepare their own tax return but who want to hire a professional to look over the return before the return is filed.

Forrester predicts that validators will provide a whole new market of tax services, and notes that H&R Block has begun formally offering this review service to its clients.

Additional information about Forrester Research can be found on their Web site.

What's your position on e-filing? Do you use this process? Do you encourage others to do so? Or do you prefer traditional paper tax return filing? Tell us where you stand in our AccountingWEB poll and see how your colleagues are voting.

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