E-filing is an electronic method of submitting your income tax return to the Internal Revenue Service (IRS) using the internet or another type of direct connection. When you e-file your taxes, you don't need to deal with paper forms, envelope stuffing, or postage to file your return. You electronically transmit your sensitive personal financial and tax data directly to the IRS.
You may also electronically transmit your credit card or bank account numbers. The IRS uses your bank account information to transfer a refund directly to your account via direct deposit. The credit card information can be used for remitting payment of taxes due.
- E-filing your tax return is a safe and secure way to file your taxes.
- Returns that are e-filed are more secure than those that are snail-mailed because your e-filed return is submitted using encryption and does not pass through human hands.
- If you choose to use a tax preparer to e-file your return, make sure you choose one that is authorized by the IRS and uses the latest encryption to send your data.
- In addition to being the most secure way to submit your taxes, e-filing will also help you get your refund faster.
Is E-File Safe When Submitting Your Tax Returns?
The short answer is yes, e-filing is very safe for submitting your tax returns. The chances are extremely remote that your income tax data could be stolen while you e-file.
E-filing is more secure than mailing a tax return via snail mail because the data in an e-filed tax return is specially encrypted for extra security. Encryption prevents any access to data as it moves between your tax software and the IRS or state tax agency.
You should still be cautious. Scammers may be looking to steal your information through phishing and may try to file fraudulent returns. There is also a chance, however remote, of a data breach at a commercial tax preparer.
Always take precautions in protecting your sensitive information. Monitor your credit reports for unusual activity, and freeze your credit if necessary.
Tax Software and Tax Preparers
The tax software site should guarantee that it uses the most secure technology available, typically a form of encryption. If you are considering filing a state tax return electronically, be sure the tax software information includes the same security for state tax agencies.
Most of the popular tax software applications have encryption and securely transmit your data. If you decide to hire someone to prepare and e-file your taxes, make sure they have the necessary IRS authorization to transmit the information.
Independent tax services must recertify and pass testing each year. The IRS maintains a list of current authorized IRS e-file providers. You may search this list by zip code and state.
You should understand that individual tax preparers may charge an additional fee for filing if you have multiple forms or schedules.
Numerous Benefits of E-Filing
E-filing is more than a way to embrace technology and save a few sheets of paper or a few cents on postage. Aside from providing a safe and secure transfer of your data to the IRS and your state's taxing authority, it offers several other benefits for you.
Easy and Accurate Calculations
When you e-file, you'll enter your tax information into online software that does the math for you. It also walks you through the process of completing your return in a straightforward manner, and you can save your work to finish it later if needed.
Many tax software packages also ask a series of questions designed to walk you through possible tax credits and deductions. These interviews are helpful in securing you the largest return possible or, if you owe, reducing the amount of taxes due.
Works on Your Schedule
E-filed returns can be filed at any time of day or night. If you haven't gotten around to doing your taxes until the last minute, you can do them late at night or in the early morning hours.
You can also have your tax preparer send your return via e-file to submit your tax return information as soon as the work is finished.
Get a Faster Refund
You'll often receive your refund sooner than if you'd used regular mail. To speed up your return, you can choose to have your funds sent to one, two, or three bank accounts via automatic deposit.
Use the IRS Website at No Charge
In most cases, you can file your federal return at no charge by using IRS Free File on the IRS.gov website. If your adjusted gross income (AGI) is under $73,000, you can use software to file your taxes for free. If your AGI is higher than that, you can use Free Fillable Forms.
The IRS also offers programs for volunteer tax assistance and tax counseling for low-income and elderly taxpayers, including free tax preparation assistance and free e-filing.
Several Payment Options
If you owe money for your taxes, you can e-file at any point up to the filing deadline (which is normally April 15) and set up an automatic payment plan with the IRS for little or no cost.
You can also pay your taxes with a debit or credit card for a small fee. Or, you can explore other payment options listed on IRS.gov's payment options page.
Won't Get Lost in the Mail
Your tax return can get lost in the mail, but an e-filed return doesn't have that problem. File electronically, and you get quick confirmation that your tax return has been submitted successfully, as well as confirmation that the IRS has accepted it.
Know When Your Refund Will Be Deposited
Your tax software can usually tell you when your refund is being processed and when to expect your refund to be deposited.
No Number Errors
Prepare your tax return on paper, and you may make an error in calculations or when transferring numbers to your tax forms. Income tax software is required to offer the option to e-file. The software will do all the tax calculations, even double-checking the numbers prior to submitting the return and guaranteeing accuracy.
E-Filed Returns Do Not Pass Through Human Hands
When your tax return is sent by mail, someone at the IRS has to enter or scan your tax information into its system. Keying errors and technical problems can interfere with getting your taxes filed correctly.
When you e-file, your data goes directly into the IRS system, bypassing the chance for human error.
A Federal Focus on E-File
Starting in 2011, with forms for the tax year 2010, the IRS stopped mailing paper tax packages to taxpayers, recommending that they find the forms they need on the internet, through Taxpayer Assistance Centers, in their communities, or by phone.
You can find and print out forms to file by mail on the IRS website. But when you e-file, the forms are automatically generated by the tax software you use.
By no longer mailing out paper tax forms, the IRS hopes to encourage more taxpayers to e-file, which is more efficient and less expensive for everyone involved.
Frequently Asked Questions (FAQs)
How long does it take to e-file?
Once you've completed your return and e-filed it, you can usually expect the IRS to accept it within 24 to 48 hours. You can track your status with the IRS2Go app, which will also let you know when your refund is approved and on its way. Early e-filers receive their refunds by March 1, 2022.
What do you need to e-file a return?
Once you've gathered all your financial statements, W2s, and other information, you'll need a way to directly connect to the IRS to e-file your return. You can use commercial IRS Free File or Fillable Forms (depending on your income level), tax prep software, or an authorized tax preparer. If you qualify, you might instead choose to e-file through a VITA or TCE site.
Can you e-file an amended return?
Yes, you can e-file an amended return by filing Form 1040-X electronically. However, this only applies to 1040 and 1040-SR returns for tax years 2019, 2020, and 2021.