HMRC hopes to save the taxpayer 800,000 by March 2015 after digitising 500 different paper forms.
The tax body is currently replacing its customer forms with electronic versions under its iForms project, so far having turned 300 of them digital.
This means that instead of phoning the tax office to order a form in the post, which used up 20 million sheets of paper a year, people can simply fill one out online.
In an update on the project today, HMRC said it has saved 354,000 so far and expects to make the remaining 200 forms available online at Gov.uk before the end of 2014.
The iForms scheme has so far saved 1.2 million envelopes and 1.6 million sheets of paper.
This will grow to three million envelopes and four million sheets of paper by March 2015.
Currently people must print and post the forms, but by March next year they will also be able to submit them online, under HMRC's plans, saving the taxpayer 800,000.
HMRC CIO Mark Dearnley said: "By the end of the year, all of our customer forms will be iForms which can be filled in online, and by next March we will have fully digitised many of them, allowing people to submit online without the need for printing.
"We're making massive changes to realise our digital vision, which will help us to give our customers a much better service. Our aim is to provide digital services which are so straightforward and convenient that everyone who has a choice will want to use them.
"We're making good progress on this and have already launched more than 300 iForms which have been used by 1.6 million customers. We've set ourselves tough timelines for achieving this and by December the remaining 200 forms will become iForms available via Gov.uk."
The iForms project is part of HMRC's digital strategy to push public transactions online, as the Government Digital Service (GDS) helps Whitehall digitise 25 exemplar public services.
