What is e-file? How do you e-file your taxes? We explain it all in this short and sweet article.
What is e-file?
eFile, also known as e-file or electronic filing, is a system for submitting tax information to the IRS through the internet or a direct connection, usually without having to submit any paperwork.
The IRS developed e-File in 1986 to lower cost and paper usage and it has grown into the most popular way for individuals and businesses to send their tax returns to IRS. Think of it as online bill pay for your taxes.
How do I e-file my taxes?
The easiest way to e-file is to use online tax software. Both IRS and all major tax software providers recommend e-file as the best way to submit your tax return. Here’s how to e-file your taxes:
Select the tax software / website that best meets your needs. If you have relatively simple finances, we hope you’ll give Common Form a try. If you have more complicated taxes, check out our friends at TaxAct.
Use the software you selected to prepare your tax return. Don’t worry, the best software packages make it very easy. You don’t need to know anything about taxes and they do all the math for you.
Once you’re done preparing your return, you’ll be asked if you want to e-file your taxes or print and mail your return to the IRS.
You’ll verify your identity and “sign” your return electronically.
The tax software you’re using will securely transmit your return to the IRS.
How much does e-file cost?
The IRS does not charge you or the tax software company you use for e-file. They want us all to use is because it’s easier for them and better for the environment.
Many tax companies do charge a modest fee for preparing your tax return with them. We have to pay our employees, buy and maintain secure servers, and have the normal expenses that any business does after all.
Most software sites allow you to start for free and not pay until the end, so you can see which one you like best before committing.
Watch out for those upgrade offers and add-ons, though. Trust me, you do NOT need audit insurance!
How do I get my refund?
This is the most important question of course! As you’re e-filing your taxes, you’ll be able to select how you want to receive your refund. The fastest way is to have it direct deposited into your bank account.
You can chose to have IRS send you a paper check, but that takes several weeks longer. Some tax companies offer pre-paid debit cards and other offers that are essentially payday loans.
We strongly recommend you avoid them – they are loaded with hidden fees and the interest rates (APR) can be astronomical. Most refunds are issued within a few days after IRS receives your efile, so you won’t have to wait long.
How do I check the status of my refund?
Once you’ve filed, you can use the IRS’s Where’s My Refund tool or IRS2Go mobile app to check the status of your refund. These tools are updated around once a day.
That’s all there is to it! The IRS is far from perfect, but e-file is a good system especially when compared to the alternative. Who wants to print their return, attach a paper copy of their W-2, and mail it all in?
If you found this information helpful, we appreciate the chance to earn your business. We pride ourselves on being the most user friendly tax software on the market.
Most of our customers get their taxes done in just a few minutes and we won’t try to sell you a bunch of extra stuff you don’t need.
What is eFile originally appeared on the Common-Form blog.
Bill Hendricks is the CEO and co-founder of Common Form, which helps people with simple finances file taxes in 5 minutes from their phone or computer.
Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.
Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.
All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.