How e-Filing Can Help You

How e-Filing Can Help You

E-filing is a phrase coined in recent years that simply means filing your taxes via the internet. E-filing is an entirely electronic process instead of the alternative paper filing process in which your tax return is prepared on paper and mailed to the IRS via the United States Postal Service. Instead of your pen signature, e-filing uses a unique combination of letters and integers known only to you as your e-signature. It is just as legally binding as any form of paper signature, so be careful to keep it completely confidential.

In recent tax years, the number of taxpayers who e-file their taxes has continued to grow, according to the IRS, e-filers now number over 70 million. There are several reasons why this method of filing taxes is growing so rapidly in popularity.

Benefits of E-filing Include:

Missing Information is Immediately Flagged. When you e-file your taxes, the advanced computer program sends you 'incomplete information' messages if you are missing any information, or if you have skipped an important step. For example, if you forget to input your social security number, exemptions, withholding allowances or applicable deductions, the system recognizes the error and notifies you. The same thing happens when a step is incomplete, such as claiming a tax credit without adding the corresponding qualifications. Informational gaps like these are some of the most common errors on paper tax returns. When you are e-filing, your tax return information must be correct and complete before you are allowed to move forward.

A Computer Double-Checks Your Math. Every good electronic filing program contains a fail-safe system for the purpose of checking your math. Simple addition and subtraction can become complicated when there are a lot of large numbers involved, and your tax return is one place you really don't want to misplace a tens digit. E-filing lets you know immediately if something does not add or deduct properly.

A Quicker Refund. Not only does e-filing help you avoid the informational errors that can tie up your paper return for a very long time, you get your income tax refund much faster. Most individuals are due back some money from the government at the completion of their taxes, and e-filing your tax return can cut the time it takes for that money to reach you in half. Choosing the direct deposit option as the method for receiving your funds will also speed the process.

Convenience. All you need to e-file your taxes is a computer with internet access. It can easily be done from home or the office, with minimum disturbance to your daily routine. E-filing eliminates the hassle of finding a big enough envelope, calculating correct postage, and the snail-mail lag time.

It is Extremely Secure. When you submit any tax information to the approved service providers, it is first converted to the file format specified by the IRS, and then transmitted directly to the IRS. Tax return information is highly sensitive, and the IRS website is encrypted to ensure that all information transmitted to and from it is secure and safe from hacking.

Notice of Submission. Usually after e-filing your tax return, the service providers sends you an acknowledgement receipt, stating that your return has been successfully submitted to the IRS. Make sure you print this out and save it for your records.

No Paper Returns. E-filing allows you to skip the entire process of filling out the complicated paper tax returns, which can save a significant amount of time. All you need is a W-2 and the other necessary tax forms for your individual return, and you can directly input the information into the e-Filing software. Some individuals do like to fill out the paper income tax return forms anyway, and use them to base the information they are inputting into the electronic filing system. This approach allows consumers the familiarity of method from previous years, and still enables them to gain the other benefits of tax filing.

No collating! Ok, maybe this isn't the most important sell-point on e-filing for you, but once you have printed a copy of your tax return for your own files, all you do is staple the applicable attachments to it. You don't have to mess with the specific order required by the IRS to avoid oversight and/or penalties. It's the little things that make the difference.


Article written by: Letty G.

Back to Articles =>