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Check all data entry carefully

E-filing is easy, but wrong data will cause rejects

Filing tax returns electronically is usually a simple matter, but certain data entry errors or inconsistencies can cause the IRS to reject an e-filed return.

According to H&R Block, rejections most commonly occur because of incorrect entries for a taxpayer's adjusted gross income, date of birth or Social Security number for the taxpayer, spouse or children.

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To prepare and file a tax return electronically, you need:

• A copy of last year's tax return.

• Social Security numbers for yourself, spouse and dependents.

• W-2 forms from all employers.

• 1099 forms showing interest, dividends, retirement or other income paid to you during the year, including refunds, credits and state and local taxes.

• Income receipts from rental real estate, royalties, partnerships, S corporations and trusts.

• Receipts and records for other income or expenses such as rental real estate, partnerships, trusts and Social Security benefits.

• Receipts pertaining to your small business.

• Unemployment compensation records.

Those who itemize deductions on Schedule A may also need the following:

• Receipts for medical and dental expenses.

• Receipts from state and local taxes, real estate taxes, and personal property taxes.

• Form 1098 for home mortgage interest and points.

• Receipts for charitable contributions and gifts.

• Casualty and theft losses.

• Job expenses.

Tax preparation programs like TurboTax or TaxCut can e-file a return, as can online tax preparers and tax professionals.

The return is transmitted via a modem to an electronic return transmitter, which converts the file to a format that meets IRS specifications and forwards it to the IRS for processing. Within 48 hours, the IRS confirms whether the return has been accepted.

Taxpayers who file electronically create a personal identification number, which serves as their electronic signature and requires knowing their 2004 adjusted gross income. Taxpayers who don't create a PIN can still file electronically but will also have to mail Form 8453-OL to the appropriate IRS service center after they have received IRS confirmation that the e-filed return was accepted.