Doing your taxes used to require the careful collection of every possible paper form you might need, and then even more carefully making sure all the right numbers ended up in the right places. It was a process that required countless corrections, and a lot of duplication of effort. Even today, some taxpayers still prefer to use paper returns, and accept the challenges they present.
Most U.S. taxpayers, however, have realized how much simpler electronic filing can be. E-filing can speed matters up for filers, and it ensures quicker receipt and processing of your returns by the IRS. Filing electronically also reduces the odds of errors, largely because most programs that facilitate it do simple things like checking your math and saving relevant information from old returns to keep you from having to waste time every year reentering the same data. Below, you'll find a quick guide that answers many questions about the e-filing process.
What options are there for e-filing?
The IRS has four electronic filing options. You can use the IRS Free File service if your adjusted gross income is $66,000 or less, with the ability to use the IRS's fillable forms to file. Free tax return preparation sites like the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs also allow free e-filing. Commercial software often includes electronic filing as an option, and certain professional preparers are designed as authorized IRS e-file providers.
Do I have to send in my Form W-2 if I e-file?
Ordinarily, those who file paper returns have to enclose a copy of their W-2 form from work. However, e-filers don't have to do so. Instead, all you have to do is take the information from the form and include it in the appropriate places in completing your tax return. Just be sure to keep a copy of your W-2 in your own records so that you can provide it to the IRS if needed later.
Will my e-filed return get rejected?
In the vast majority of cases, e-filed tax returns are accepted promptly by the IRS. However, some returns get rejected. The most common reason is if you've made a simple error, such as a mistake in entering information like Social Security numbers, the tax identification number of a payer, or misspelling of names. Omitting a necessary form can also get your return rejected. In these simple cases, all you have to do is fix the problem and refile electronically. There are some more complicated situations in which you might have to file by mail instead, but these are rarer than the basic errors that come up most often.
What if my e-filed return keeps getting rejected because of a dependent issue?
The IRS notes that one reason why returns can get rejected is when multiple taxpayers claim the same person as a dependent. In that case, the fact that the Social Security number shows up on two separate returns can trigger red flags that lead to the rejection of the return. Sometimes, the IRS will contact other taxpayers using that dependent's Social Security number to reconsider their decision to claim that person or ask for documentation. In most cases, though, you'll generally need to file a paper return and be ready to defend your dependent claim.
Is there a deadline for filing electronically?
The IRS keeps open the ability to file electronically until November. However, the same rules for timely returns apply to e-filed returns as for paper returns. If you miss the tax filing deadline, then your return won't be considered timely, and that will leave you open to potential interest and penalties on any underpayments that might apply. An extension to file, whether filed electronically or by mail, will give you until mid-October to file your full return electronically.
Can I e-file amended returns?
No. E-filing is only available for original returns. In addition, special types of returns for nonresidents and returns for prior years beyond a certain date must be mailed.
Be smart about e-filing
Electronic filing is your best tax filing option in most cases, because it leads to faster refunds and more secure delivery of your personal tax information to the IRS. If you haven't yet joined the tens of millions of people who file electronically, be sure to consider it for this tax season.