For decades, filing your tax returns by mail has been the norm. But you don’t have to worry about meeting mailing deadlines anymore. There’s an easier, faster and more convenient way to file your taxes — online tax filing.
In this guide, you’ll learn why electronic tax filing is better, and we’ll cover the best online tax filing tips to help you file your taxes with ease. Learn how to save time, reduce stress and potentially maximize your refund.
Ready to join the millions of taxpayers who have already made the switch to online tax filing?
Why is it better to e-file rather than file your taxes by mail?
Electronic tax filing, or e-filing, has become increasingly popular in recent years due to its many benefits over traditional paper filing. Here are the advantages it offers:
- Faster processing: E-filing your federal taxes is faster than mailing a paper return. So how long does it take to file taxes online? The IRS typically processes e-filed returns in less than three weeks, compared to six to eight weeks for paper returns.
- Increased accuracy: Online tax filing reduces the risk of errors and increases the accuracy of your return. Tax preparation software automatically performs calculations and checks for common errors people usually make in their paper returns, reducing the chance of mistakes.
- Convenience: It’s convenient and can be done from the comfort of your home. You can e-file at any time of day or night, without having to worry about post office hours or mailing deadlines. Or worse, worrying about printing copies or buying envelopes and stamps.
- Quick and easy to fix mistakes: With e-files, IRS computers check your return for mistakes automatically. If they find any issues, they instantly send your return back to you – giving you the chance to quickly fix it and send it back. You save time and avoid letting a minor error delay your refund.
- Quicker refunds: If you’re eligible for a refund, online tax filing will get your money to you faster than paper filing. The IRS issues most refunds within 21 days of receiving an e-filed return.
- Default direct deposit: When you e-file your taxes, a direct deposit into your bank account is the default choice on tax software — just like a paycheck! You can change the payment method and information anytime. This method is more secure because there isn’t a check to get lost.
- Environmentally friendly: Electronic tax filing is an environmentally friendly way to file your taxes by reducing the need for paper. It helps to conserve resources and reduce waste.
- Secure: E-filing is secure and protects your personal information. The IRS and tax software use encryption and other security measures to protect your information and prevent fraud.
Tips for online tax filing
Now that you’re convinced you should e-file your federal taxes, you may be wondering how to do it. Check out the following tips to learn exactly how to file your taxes online.
1. Choose a secure tax software
Choosing a reputable and secure tax preparation software is the most important step.
The software you choose depends on the type of return that fits your needs. Do you need to file a simple return? Or do you need help maximizing deductions, filing as self-employed, or filing as a rental property owner? The tax software options on the market offer different packages and prices catering to specific requirements, so consider your needs when comparing plans.
And if you have questions, LegalShield can even help you figure out what type of return you need to file.
When it comes to security measures, look for software that is authorized by the IRS. Consider software that employs encryption, multi-factor authentication and other security measures to protect your sensitive information.
While you do your research, review customer feedback and ratings. You want to choose a tax preparation company that has a good reputation. Evaluate the software’s history of security and privacy, including any earlier data breaches or security incidents.
Finally, strong customer support is crucial. Make sure the software you choose offers reliable support through phone and email in case you face any issues or have questions about your tax return.
2. Gather all necessary documents
Ah yes, this step is tedious but bear with us! You don’t want to miss a document that may affect your refund. Before you start your online tax filing process, make sure you have all the necessary documents on hand. This will ease the process and ensure your return is accurate and complete.
These are the key documents you should gather by categories:
- Social Security numbers, tax ID, or Identity Protection PIN for you, your spouse and any dependents
- Bank routing and account numbers for the direct deposit
- Last year’s return, if applicable
- W-2 forms from each employer you worked for during the year (and your spouse’s if you’re filing jointly)
- 1099 forms for any other income, such as independent contractor, interest, or dividends
- Records of any unemployment compensation or alimony received
- Evidence of business income and expenses if you’re self-employed
We’ll expand more on deductions and credits in the next section, but for now, the following are examples of deductions you should collect:
- Records of state and local taxes or real estate taxes paid (if any)
- Documentation of charitable contributions
- Receipts of medical expenses if you’re itemizing deductions
- Documentation of retirement account contributions
- Property taxes and mortgage interest
- Records of classroom expenses
- Records of any educational expenses
- Records of any childcare expenses
- Records of any energy-efficient home improvements
- Evidence of retirement contributions (to claim the saver’s credit)
3. Take advantage of tax deductions and credits
Maximizing your deductions and credits is a step you don’t want to overlook. Make sure you claim all tax deductions and credits you’re eligible for, as they can significantly lower your tax bill.
States have different types of deductions and credits you may be eligible for, so it’s important to do your research first.
Here are a few examples of tax deductions and credits you may not be aware of:
- State and local sales tax: You may choose to deduct either state and local sales taxes instead of state and local income taxes if it’s a larger deduction. Let’s say you live in a state with a low state income tax, you may find that deducting sales taxes results in a larger deduction.
- Student loan interest: You may be able to deduct up to $2,500 of student loan interest paid during the year.
- Teacher expenses: Teachers can deduct up to $250 of out-of-pocket expenses for classroom supplies.
- Energy-efficient home improvements: You may be eligible for a tax credit for making energy-efficient improvements to your home.
- Health savings account contributions: If you have a health savings account (HSA), you may be able to deduct contributions you made to the account during the year.
- Job search expenses: If you’re looking for a job in the same field as your current or most recent job, you may be able to deduct certain job search expenses, such as resume preparation and travel expenses.
- Charitable mileage: You may be able to deduct 14 cents per mile driven for charitable purposes.
- Moving expenses: If you move due to a change in your job or business location, you may be able to deduct certain moving expenses, such as the cost of moving your household goods and the cost of traveling to your new home.
You can find tax credits available in your state and determine which ones you qualify for by visiting your state’s Department of Revenue or Taxation website.
Most tax preparation software will automatically help you find which credits you may be eligible for — the perks of technology! Finally, of course, you can consult a tax professional in your state.
This can help you lower the taxes you owe and receive a larger refund.
4. Review and double-check your information
This last step is easy as pie, but necessary. Before sending your return, review it thoroughly to ensure all the information is complete and error-free.
Carefully review your personal information, such as your name, address, Social Security number, bank account information for the direct deposit, income information, deductions and credits.
Double-checking your info before you send it is easier than having to make a correction later on. You don’t want to get a notice from the IRS asking you to amend your return. But if you do, tax preparation software makes it easy and fast to update a tax return, but it still takes time and effort. Prevent headaches if possible!
How can LegalShield support you with your taxes?
Whether you’re a seasoned online tax filer or doing it for the first time, LegalShield can provide the guidance and support you need to make the process as smooth and stress-free as possible. Let’s dive in and explore how LegalShield’s prepaid legal plans can support you this tax season and throughout the year!
Income tax audit services
When you get a LegalShield Membership, you get full access to a provider law firm in your state. If audited by the IRS for your individual income tax return, you’ll receive access to a provider lawyer for advice, consultation, negotiations and representation.
Advice and consultation from a law firm
You can also call your provider law firm for consultation and legal advice on any personal legal matter, including tax advice and consultation. What an easy way to figure out those deductions and credits in your state, right?
Learn about ID theft during tax season
Do you know that tax season is a popular time for identity thieves? For real! When you file your federal taxes, you’re sharing sensitive information such as Social Security numbers, income information and bank accounts. This information is essential to identity thieves, who can use it for many fraudulent activities.
The most common way scammers target their victims is by sending fake emails, text messages, or phone calls that appear to be from the IRS or the creator of tax preparation software, asking for personal and financial information.
Another popular tactic is to intercept paper returns. When you file by mail, your return can be stolen and intercepted. Scammers change the mailing address or direct deposit info on your return before sending it to the IRS.
To protect yourself, use secure tax preparation software, protect your computer with antivirus software, avoid phishing scams and regularly monitor your financial accounts. Learn how IDShield can help you prevent identity theft.