Online tax filing popular with Hawai'i residents
By Dan Nakaso
Advertiser Staff Writer
Federal online tax filings from Hawai'i are up 16 percent, and the state for the first time is set up to accept certain personal and business tax returns as the April 15 deadline draws closer.
Each online return filed with the state saves an estimated $2 in processing fees, said Dan Morrison, general manager for the Hawaii Information Consortium that operates the state's online portal. But the true savings come from faster and more efficient processing with fewer mistakes, he said.
Taxpayers already are using the computers available in state libraries. And next week Morrison said he hopes to have information kiosks installed in every library to help even more people file returns.
Some Hawai'i taxpayers may face special problems this year, said IRS spokeswoman Shawn George in Seattle. Thousands who received unemployment benefits after Sept. 11 may not realize their benefits are taxable, she said.
Nationally, people are also confused about whether they need to declare the $300 or $600 rate reductions that went out last summer. They don't.
"We're finding many errors on tax returns," George said. "Some people are claiming the $300 for single people and $600 for married couples as income, and they don't need to."
George also emphasized that people who are unable to pay their taxes should file their returns anyway and make arrangements for a payment schedule. They can simply attach a letter expressing their intention to pay their taxes in installments, and they'll be contacted later by the IRS, she said.
The Internal Revenue Service expects to receive 569,000 individual 1040 tax returns this year from Hawai'i — up from last year's 557,444.
The number of online filings is also shooting up. As of mid-March, the IRS received 113,488 online filings. Some 84,123 were filed by tax preparers (up 12 percent); Another 19,499 came from individuals who used software packages or downloaded programs (up 65 percent). The number of taxpayers who file over the telephone — 9,866 — is down nearly 11 percent.
Most people so far — 146,580 — have stuck with old-fashioned paper and mailed their returns.
The state also has made it possible to file the personal income short form online through its Web site at ehawaiigov.org/efile. The goal is to get 10 percent of short-form taxpayers filing online. But Morrison said, "that's incredibly optimistic for the first year."
Business owners can file their G45 periodic excise tax, G49 annual excise tax filings, TA-2 annual transient accommodations filings and TA-1 periodic transient accommodations filings through ehawaiigov.org/efile.
Morrison didn't have the number of business filings so far, but the amount of taxes filed in the past month is worth $1.5 million.
"We're making it easier for people to do something that's painful for people," Morrison said, "which is to pay taxes."
Reach Dan Nakaso at 525-8085 or dnakaso@honoluluadvertiser.com.
