Form 1040, one of the most foreboding phrases in the English language, had its origin a scant 96 years ago with the passage of the 16th Amendment to the Constitution. In 1913, electricity itself was still rare, let alone electronic appliances.
          Today, most of what we do is electronic - even replacing paper books and newspapers with eBooks. Much of the financial system runs on electronics including banking, bill paying, trading stocks and now an expanded ability to contribute to the fiscal well-being of the country by filing Form 1040 from the comfort of your own computer.
          On Jan. 16, the IRS announced its expanded e-File program. According to the IRS, the new e-file program includes improvements to the Free File program that will allow virtually all taxpayers to e-file -- free. Filing electronically with direct deposit can produce a refund to the taxpayer in as few as 10 days.
          To receive a refund in 10 days, the taxpayer should use Free File, an Internet-based computer application developed jointly by the IRS and Free File Alliance LLC, a group of private-sector tax software companies. The Free File Alliance offers the most commonly filed forms and schedules for taxpayers, 24 in total.
          For those with taxable incomes greater than $56,000, the IRS offers "Free File Fillable Forms." This feature is the major new component of this year's e-filing system. With the addition of Free File Fillable Forms, potentially everyone may file electronically.
          For taxpayers with Adjusted Gross Income (AGI) of $56,000 or less in 2008, there are 20 software options that will assist with the process. The taxpayer may choose from a list of software options (click the "help me find a company" button), including well-known products such as TurboTax and H&R Block's TaxCut.
          In addition to working directly through the IRS website, there are a variety of commercially available tax software products that offer e-file, and many will be offering free e-filing for the first time this year. The IRS e-file system also allows the filing of Colorado state tax returns.
          Free File may be found at http://www.irs.gov/efile/.
          For 2007, more than 70 percent of tax returns were filed electronically. The IRS hopes that with the improvements to the e-File program, virtually all returns can be submitted without paper.
          To explore free electronic filing further, visit the following Internet sites:
- 1040 Central: http://www.irs.gov/individuals/article/0,,id=118506,00.html
- IRS e-File for Individuals: http://www.irs.gov/efile/article/0,,id=118508,00.html
- Free File Home: http://www.irs.gov/efile/article/0,,id=118986,00.html
          In addition to improvements in the mechanism for filing tax returns, there are a few tax-law changes for 2008 that are worth highlighting regardless of the method used to file the return, especially if income is less for 2008. Of the 24 changes for 2008 (http://www.irs.gov/publications/p553/ch01.html#d0e1203), here are a few of the most important.
          - Mortgage workouts and foreclosures: If the balance of the loan was less than $2 million, eligible homeowners can exclude debt forgiven on their principal residence.
In the past, forgiven debt would have been treated as taxable income. The taxpayer will receive a 1099-C with the "Amount of debt canceled" in box 2.
          - First-time homebuyer credit: This is an exceptional credit of up to $7,500 that is much like a 15-year interest-free loan.
          The credit is also available if the taxpayer has not purchased a home in the past three years. A page on IRS.gov (http://www.irs.gov/newsroom/article/0,,id=187935,00.html) has more answers to common questions.
          - The recovery-rebate credit: A taxpayer may still qualify for the recovery-rebate credit, if, for example, he or she did not get an economic-stimulus payment, had a child in 2008 or had a change in income level.
          The rebate is calculated like 2007's economic-stimulus payment except that recovery-rebate credit amounts are based on tax year 2008 instead of 2007.
          - Standard deduction for real estate taxes: Taxpayers can claim an additional standard deduction, based on the state or local real estate taxes paid in 2008. The maximum deduction is $500, or $1,000 for joint filers.
          - Increase to earned-income credit: The maximum earned income tax credit for low- and middle-income workers and working families with two or more children is $4,824 in 2008, up from $4,716 in 2007.
          The qualifying income limit for the credit for joint return filers with two or more children is $41,646 in 2008, up from $39,783.
          The general Internal Revenue Service website, http://www.irs.gov, has more information on these and other credits, such as the child tax credit, the earned-income tax credit and alternative-fuel vehicle credit, as well as direct links to all electronic filing tools.