Tax preparation software and online tax filing services may make e-filing your taxes a breeze. Here are some tips on how to e-file taxes smoothly.
Are you still filing your taxes the old-fashioned way, with a paper return? Want to file your taxes electronically, but aren’t sure how? Software programs and online services can help with tax preparation and tax filing if you choose to do them on your own.
There are plenty of potential benefits to e-filing your taxes. When you’re using software like TurboTax, H&R Block, Tax Act or any of the other programs available, there may be some potential benefits.
Another bonus for those who file taxes online? You’ll know in 48 hours that the Internal Revenue Service has your return, and they’ll inform you if there were any errors, allowing you to quickly fix and resubmit. With snail mail, you might not know if the IRS has your return (unless you paid extra for a receipt, and that confirmation can take weeks).
And from a tax preparation standpoint, using a software program instead of a CPA may save you some money. That being said, there are benefits to using a licensed professional, especially if you have complicated tax circumstances. Of course, if you do use a tax pro, he or she may be filing electronically on your behalf.
Either way, here are a few things to know about e-filing.
To file a completely paperless return, you’ll use a self-selected personal identification number (PIN), something with which most of us are familiar. That PIN is your electronic signature. And you may be able to file your state return electronically, too—37 states and the District of Columbia let taxpayers e-file state returns when they file federal tax returns online. You send both returns to the IRS, and the IRS sends your state return to your state’s taxing authority.
With snail mail, you might not know if the IRS has your return (unless you paid extra for a receipt, and that confirmation can take weeks).
Worried about confidentiality? While nothing is guaranteed to be hack-proof, the IRS uses the same strict rules for e-filing as they do for paper returns, and tax software falls under their same careful customer confidentiality rules.
Just as you can get a refund through e-file, you can also e-file if you owe money. The IRS still takes paper checks, or you can tell the IRS to debit a checking or savings account for what you owe on the due date. And speaking of money, the IRS and states don’t charge for e-filing, although tax software may require fees.
Was your attempt to e-file rejected? Don’t worry, it’s not personal. Here are a few common reasons why this happens.
First, check your Social Security number in case you transposed numbers or hit a wrong key. The IRS does check that your Social Security number and your name match. Filing a joint return? Ensure that the number you’ve entered matches that of the primary taxpayer. If your name changed because of marriage or divorce, you may need to notify the Social Security Administration to reassign your number to your new name.
Dependent claims can also trigger rejections. Check for any typos and confirm that the dependent isn’t claimed on another tax return.
Sometimes certain filing statuses require more information, such as filing for head of household. If you file for this status but forgot to list any dependents, that error gets caught by the e-filing system.
If your income doesn’t match, that too can trigger a rejection. With many online tax prep solutions, you can import your W-2 information directly into your return from thousands of employers, which may cut down on errors.
With online tax preparation software readily available, set up to be friendlier to use, and confidential, it could make sense for you to consider e filing this year.
TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2021 Charles Schwab & Co. Inc. All rights reserved.