Few isle residents choose
to file taxes electronically

When it comes to filing federal tax returns, island residents prefer to stay off-line.

The Internal Revenue Service said Hawaii ranks third lowest in the nation, at 37.3 percent, in filing tax returns electronically.

IRS figures show that Minnesota has the highest e-filing rate to date, 63.8 percent. New York and New Jersey were tied for lowest, at 32.2 percent.

IRS Commissioner Mark Everson said he expects about half of the country's 133 million tax returns to be filed electronically this tax season.

"E-filing has reached a critical mass, and it is becoming the rule rather than the exception," Everson said.

Nationally, of the 55 million returns filed as of March 4, 72 percent were e-filed, up from 67 percent the previous year. That percentage will decline as the April 15 deadline approaches.

The fastest-growing segment of e-filed returns is among people who do their own returns on a home computer. That number is 9.8 million this year, up more than 14 percent from the same period last year, IRS figures show.

The jump in computer usage coincides with more publicity about the agency's Free File program. The IRS and a consortium of tax software manufacturers offer free software and filing through Free File, which is available at irs.gov.

The IRS said mandatory electronic filing of some state tax returns boosted the federal e-filing rate in states including Minnesota, Iowa and Wisconsin.