Obviously many people are becoming more comfortable as electronic tax preparation and filing has been growing rapidly. Both number of people "e-filing" and services available (sometimes for free) to file your taxes directly online are growing. This year IRS has estimated it will receive approximately one third of its individual returns electronically (45 million).

In this report I will explore some of basic advantages to filing online, leading software packages and internet filing systems available, some ratings/rankings and more links should you wish to get more information.

Benefits The advantages of using tax software for your return and filing online are numerous:

* Fast Refunds - Most refunds are issued within days of acknowledgment

* Direct Electronic Deposit or Payment - Electronic deposit or payment is available

* Acknowledgment of Returns- Receipt of returns are confirmed using an electronic acknowledgment system.

* Fewer errors - Electronically filed tax returns are received virtually error-free, and this is welcome news considering all of complex changes from year to year. (Statistics (US) show 12% of all paper returns have some sort of error.) You also have to consider that when you send a "paper" return, your information also has to be keyed in by government which increases chance for error through a "key-in" mistake.

* Easy to use - tax software and web sites let you prepare and file electronically are getting better and easier to use all time. They "hold your hand" through process, giving you "alerts" that can guide you through process and let you take advantage of any new changes that may help you.

* Convenience- The federal/State Program is a "one stop shop" tax filing. E-file allows taxpayers to file both their federal and state tax returns in one transmission.

How To: You can either use a software package or a web site to prepare your return and submit it online. The third option is to use a tax preparer that will prepare your taxes and file them electronically for you. Below are leading software packages and more information links for both US and Canada.

United States of America The cost of preparing your taxes and filing electronically varies dramatically according to complexity of programs you choose. For example there are free internet programs available, or products that range from between $15 to $80. This link identifies a list of partnership companies with IRS that include free internet filing opportunities http://www.irs.gov./efile/display/0,,i1%3D51%26genericId% 3D15025,00.html

When it is time to pay your Federal taxes they can now be paid through a new Electronic Federal Tax Payment System web site. www.officialpayments.com

Visit IRS web site http://www.irs.gov for helpful information on e-filing. The IRS also allows you to search for official e-file preparer near you by zip code.

Packages Available: Some of most popular products available are listed below. These companies also have a tax web site that you can access, and in most cases are also selling more complex "deluxe" versions.

Intuit's TurboTax http://www.turbotax.com H&R Block's TaxCut http://www.hrblock.com 2nd Story Software's TaxAct http://www.completetax.com

Once you have prepared your return, you can either print it out and send it in by mail, or you can send it online to IRS. Most state returns can also be submitted online although some have not put in place technology to receive electronic returns yet (Florida, New Hampshire, Tennessee). One other point to consider when deciding whether you should you use an internet service or a tax software system on your hard drive is storage of your return. Myself personally, I prefer more control and want to save my return stored on my hard drive and not by a third party online.

As interesting as time value of money is to economists and financial planners, if you're anything like me, you probably find whole subject just a little short of riveting. So here's something more interesting to think about. The money value of time. Your time, that is.

Why do you need to think about money value of time? Because, quite simply, once you truly understand what your time is worth, in dollar terms, you will work your business more productively and efficiently than ever before.

In my other life, I'm an attorney. I work for a downtown Los Angeles law firm and, like any other law firm, what counts is how many billable hours I clock each month. We have software to track it all for us of course. My time is charged out at $250 an hour. In a minimum of six minute increments. This means that if I so much as pick up and read a one paragraph letter from another attorney, my client is billed $25.

Spend enough time tracking your time like this, getting to end of day and needing to see at least seven billable hours totaled on your computer screen and you soon develop a very healthy respect for dollar value of time.

And because I don't want to have to be at office for ten hours before I've generated seven that are billable, let me assure you I work very efficiently indeed.

In process, I've become an expert at avoiding time wasters and unproductive activities. As a result I can usually generate seven billable hours from being in office for only eight. (The other hour is unavoidable non-billable general admin type stuff.)

My point? Start thinking like an attorney when it comes to how you value and spend your time. Here's how.

First, decide what level of income you need from your business. For purposes of our example, let's say it's $52,000 per year or $1,000 per week.

Next, decide how many hours you want to work each week. To keep math simple, let's say you're going to work 50 hours a week. Therefore, on average, you need to generate $20 for every hour of time you spend working in your business.

But not all of your time will be revenue-generating (i.e., "billable") time. Any business has its share of non-billable time - those routine administrative tasks that must be done even though they make no contribution to your bottom line.

So, now you have a choice. You can either work more hours each week to cover your non-billable time, or you can increase amount you need to earn from every billable hour. The first option means working longer. The second option means working smarter. Your choice.

Whatever you decide, keep that hourly rate firmly in mind. Every hour of your time is worth $20 (or whatever rate you have calculated for yourself).