The Benefits of eFiling Your Taxes

Each year brings with it more and more taxpayers who are filing their income tax returns electronically. Last year, over 70 million taxpayers filed electronically. In fact, the IRS has a goal to eventually have the majority of U.S. taxpayers using this form of filing our income tax returns. The reasons for the popularity of online filing are varied. If you have not yet filed your income tax return electronically (also known as e-filing or online filing), perhaps it is time to start seriously thinking about it. Here are just some reasons to file your tax return the online (electronic) way:

Physical:

No headaches or eyestrain. Eyestrains and the accompanying headaches are two results of having to do detailed, closeup work. By preparing your income tax return manually, you need to concentrate on small print and small lines. Some eyes will not, or do not, like that. Filing electronically reduces this.

No hand or muscle cramps. You will not have to be concerned about holding a writing utensil for any extended period of time when you file the electronic way. This can save you from pain and anguish. Every writer knows what it is like to clench a pen for any extended period of time. Ouch!

Technical:

Accuracy. By using e-filing, the chance of error goes down to about 1%. That is because the various tax preparation software used by service providers (like the ones you will find on the IRS e-filer site) provide for double-checking all the inputted information. If any error occurs, you will receive an error message to correct it. Hence, the submitted copy to the IRS will be nearly error-free.

Security. Tax returns processed electronically (e-filed) are processed over secure and encrypted lines. Your personal and financial information is transmitted and converted to a file format specified by the IRS. The IRS requires all e-filing partners to abide by security and privacy certifications.

Paperless. By e-filing your income tax return, you can save time, money, and frustration. Just the fact that you will not have to be a paper shuffler alone makes it worthwhile to electronically file.

You may want to think about this: It is a good idea to prepare a tax return by hand that includes all the relevant information. That way, once you begin your online process you can simply take information from your hand-prepared return and input it into the tax preparation software you choose. This is great for anything other than the simple tax return.

Correctness. Tax preparation software programs will aid you throughout your online tax preparation process. Let us say, for instance, you decide you are filing an IRS Form 1040EZ. However, you input itemized deductions. The tax preparation software will pick this up and tell you that you are filing the incorrect form. This is an extra safety measure for you. If you would have submitted your tax return to the IRS with this error on it, you would have received an IRS Notice stating the inconsistency.

Completeness. The online tax preparation software will let you know if your tax return is missing any information. For instance, if you do not enter your exemption figure, social security number(s), withholding allowances, social security number(s), or applicable deductions, you will receive an 'incomplete information' message. Missing information can also be you claiming a tax credit without any corresponding qualifications, as an example. Once again, this will require you to correct it before you are allowed to move forward.

Receipt Acknowledgement. Upon completing and submitting your income tax return, your service provider will send you a 'receipt acknowledgement confirmation'. This means that your income tax return was submitted properly. Keep this for your records.

Faster refund. By efiling your tax return, you will receive your income tax refund faster. In fact, refunds are known for happening in half the time as that of a paper filed tax return. You can get your tax refund even quicker if you have the direct deposit method of receiving it.

Non-Technical.

Saves Time & Money. You will not have to take the time to make a trip to the post office, nor buy postage, if you file online.

Convenience. All you need to prepare your tax return the efile way is a computer with Internet access. You can easily sit at home, at the library, or have someone else with online access do it. More and more tax returns are done on home computers. That number is expected to increase for the convenience factor alone.

Papers. By efiling, you do not need to concern yourself with putting all the applicable attachments in order. If you were preparing a paper return, you would need to put your attachments in the order that they appear on your 1040. Collating (that is the term used to) your paper tax return is recommended, anyways. Tax preparers do it as a way to please the IRS. When you efile your tax return, who cares what order your attachments are in?

Human error. When you file a paper return, the IRS can unstable it and take it apart. When they put it back together, they may mistakenly misplace one of your tax documents. You do not have to concern yourself with this when you efile your income tax return.