WASHINGTON — Filing taxes electronically is the quickest way to get a refund. The Internal Revenue Service hopes that carrot will draw even more e-filing taxpayers this year.

"E-filing is changing the way the nation does taxes," said IRS Commissioner Mark Everson. He said the agency received 73 million electronically filed tax returns in 2006. About 61 million taxpayers submitted paper returns in 2006.

More than 20 million returns were filed from home computers, an increase of about 19 percent over the previous year.

Refunds for e-filed tax returns come in about two weeks if the IRS deposits the refund directly into the taxpayer's bank account. That's compared with eight weeks for taxpayers who file a paper return and opt for a paper refund check.

Besides producing faster refunds, filing electronically reduces errors because tax preparation software rejects returns with data entry mistakes or inconsistencies. The most common problems — an incorrect adjusted gross income figure or Social Security number, or carrying over the wrong amount from the tax table — are often careless errors that are easy for taxpayers to fix once the tax program highlights them.

In many cases, state and local tax returns can be e-filed at the same time as federal returns.

There are several routes for federal e-filing. If your adjusted gross income is $52,000 or less, you can qualify for free online tax preparation and e-filing through the IRS's Free File alliance of tax prep companies — as long as you use the IRS Web site www.irs.gov to link to those offers.

Some of those companies may be limited to filing in certain states or to taxpayers of a certain income level. The IRS advises taxpayers to "carefully review the free offer descriptions" before starting their returns.

While tax prep and e-filing of a federal return may be free, the company may charge for filing state or local income taxes. It also may sell other services or products, which the IRS notes that consumers are under no obligation to purchase.

There's a new, consumer-friendly wrinkle to Free File this year. Companies in the Free File Alliance have agreed not to offer Refund Anticipation Loans, which provide taxpayers quick cash against their expected refunds, usually for high fees.

"We heard many legitimate concerns about the marketing of ancillary products during the last filing season," Everson, of the IRS, said in a statement. "This is a constructive step."

Another way to e-file is by using home tax software such as TurboTax or TaxCut. The programs can be bought online or in office supply stores and usually include rebates and coupons for free e-filing of at least one tax return. The companies — Intuit in the case of TurboTax and H&R Block in the case of TaxCut — update tax forms and instructions as they are updated by the IRS. These can be downloaded from the programs' Web sites during filing season.

Such programs use an interview process to walk taxpayers through the return preparation. Beforehand, gather your records: your 2005 tax return; 2006 income records such as W-2 statements from employers and end-of-year interest and dividend statements, as well as any 2006 tax refunds; and payments such as state and local taxes, business expenses, mortgage interest and any other deductible expenses.

Taxpayers also can take their records to a professional preparer, who can also file the tax return electronically. It's a more costly route, though it may be worth it if your taxes are complicated. Tax preparation bills from H&R Block, for example, average about $160 per client, according to the company.

The IRS can find an e-filing tax pro for you if you enter your ZIP code in the e-file locator box on www.irs.gov.

Taxpayers due a refund must provide bank account and routing numbers for direct deposit of refunds. Starting this year, taxpayers who use direct deposit will be able to divide their refunds into three separate deposits to financial accounts, such as checking, savings and retirement accounts.

Those owing tax can pay electronically by charging it to a credit card; having the IRS withdraw the money directly from a bank account; or through the U.S. Treasury's Electronic Federal Tax Payment System by phone or over the Internet. See http://eftps.gov for more information. (But don't respond to e-mails purporting to be from EFTPS and asking for personal information; that's a known scam.)

E-filing taxpayers create a personal identification number, which serves as their electronic signature and requires knowing their 2005 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.

During transmission, the tax return is sent from a modem or other Internet connection 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 or rejected.