8 Insider Secrets to E-filing Your Tax Returns
E-filing is in. According to the IRS, 31 million of the 132 million taxpayers who filed last year chose to e-file, which was a 19.3 percent increase over 2008. That percentage will undoubtedly increase again this year. But what if it’s your first time e-filing? Why should you do it? Where should you start.
Here are eight beginners’ tips and insider secrets that will ease e-file anxieties and get you started:
1. Have all documents ready
It may sound simple, but first and foremost, be sure to have all documents in front of you and double check that you are using a W2 form – not your last pay stub.
2. The IRS is Not Your Enemy
The IRS Free File home page is the best place to start. Everything you need to know is right there, and it’s not trying to rip you off or turn a profit. The IRS says about 70 percent of taxpayers can file for free using its Free File program, so go ahead and check it out!
3. Don’t Worry About the Math
By e-filing, the software takes care of errors that are easily made while filing manually. The numbers are populated so you don’t have to worry about calculating them yourself.
4. Keep it ALL Online
When you’re filing your taxes online, don’t give up if you hit a roadblock! You can use sites like JustAnswer, which has verified tax experts on call 24/7 to get your questions answered. Tax questions begin at $15 and take as little as a few minutes to get answered – a good resource for extremely busy or last-minute filers!
5. Get Your Return Money Earlier
The simple truth is that if you e-file earlier and opt for direct deposit, you’ll get your money earlier. The closer you file your return to the looming April 15 due date, the longer it takes to get your refund. On average, e-filed returns will come several days sooner than mailed returns and opting for direct deposit should also speed things up. Besides, you’re not the only one procrastinating, so if you wait until the very last minute, the software vendor you’re using may crash. That will cause one headache you don’t want to deal with.
6. Yes, it’s Secure
It can be a bit unnerving to submit your personal information over the web. While using a third party web site or downloadable software, you can easily check to see if the service uses security encryption by looking for a security logo. Two of the most common services are Verisign and TRUSTe. If the site or service has either of these logos, you can trust it’s secure and e-file away!
7. Fixing a Mistake
If you've made an error and already e-filed your return, you must file an amended return on paper to handle the corrections. Don’t panic, and don’t go online hoping to make a quick change and resubmit your form.
8. Checking it Twice
There are a couple precautions you should take before you finish. First, compare this year's information with your return from last year to be sure that you haven't missed anything. Second, print the return – maybe two copies to be on the safe side. Third, write down the e-file web page you used, as well as your login name and password on the printed return. Last but not least, put a copy of everything in a safe place.
The most basic rules of tax preparation
Dealing with kids and marriages: If you’re married or divorced be sure that you and your spouse’s last names match all social security records, because your return will be rejected if they don’t. Also, if you’re divorced with children, be sure you know who’s claiming the kids. The rule is that whoever files first will initially get the credit and if it’s not the right person, correspondence with the IRS will be required by both parties to resolve the matter. To avoid that mess, it’s something you NEED to work out beforehand.
E-filing is the way to go: If you’re doing your taxes yourself, you should save yourself some time and money by e-filing using the IRS’s Free File program. The online form populates the numbers for you so you don’t have to worry about calculating the math. The other upside is that once you submit your return, you will receive your check earlier than if you had submitted it manually.
Use the correct forms: Make sure you use your W2 forms and not a recent pay stub – there is a huge difference.
Need an extension? Make sure you file it by April 15, unless you are living out of the country in which case you have until June 15 to file your return or file for an extension. Remember, extensions should include an approximation of the amount you owe, whether remitted or not. Failure to properly estimate your liability could lead to a rejection of your extension request and could result in late filing penalties.
Please Don’t Procrastinate: If you want your money earlier, you need to file your return earlier. The closer you file your return to the due date, the longer it will take for you to get it back.
And Don’t Pay Extra: Paying to get your return earlier is never worth it. Avoid anticipation loans or quick refunds because the cost isn’t worth having the funds a few day’s early.