The Best Way to File Taxes? 5 Things to Know About E-Filing Your Taxes
Filing your taxes can be scary in any year. But in 2019, more people than usual felt afraid to file. That’s because 2019 was the first year that major federal tax code changes took effect.
But, delaying filing your taxes only delays the inevitable. If you don’t file on time, you’re risking more penalties.
That’s the bad news. The good news is that, even after the tax law changes, filing online is still the best way to file taxes for most people. With the new TurboTax Live, you can file taxes and ask questions of a CPA right from your home in Chicago or any other US city.
In fact, filing by paper is usually harder than electronic tax filing. Read on for 5 key things you need to know about income tax e-filing.
1. It’s the Preferred Way of Filing
In general, e-file taxes are easier on both taxpayers and the federal government. In 2018, the IRS expected 90 percent of people to file their taxes via electronic means.
We can pay our electric bill online. We can order Chinese food through apps on our phones. It only makes sense that most people would also prefer an electronic tax filing to a paper one.
2. You Have Multiple Options
There’s no one way to file your taxes online. IRS Free File is a great option for people who make below a certain income. However, it only applies to federal income taxes, not state ones.
Many people also use tax prep software to help them. Those often cost money, but you can sometimes find them for free.
But take note: tax software programs can get confusing. If you’ve never done taxes on your own before, it may feel overwhelming.
3. You Can Still Hire a Tax Preparer
The rise of e-filing has not diminished the need for people to hire professional tax preparers. These people often provide more reassurance than software on your computer.
Hiring a person can also be quicker. Most times, you just need to take a few documents to your tax person, then answer a few questions.
The process often gets completed in one or two visits. Professionals will use an EFIN for tax preparers. That’s not the same as an Employee Identification Number, or EIN.
4. Refunds are Faster
A couple of decades ago, filing your taxes meant mailing off some papers and then waiting a few weeks for a check to come in the mail. Figuring out how to e-file taxes means you remove a big chunk of that waiting period.
You can get your tax refund in a matter of days instead of weeks. In most cases, it’s directly deposited into your account. There’s no need to worry about keeping track of a paper check.
5. There’s a Specific E-Filing Period
You can’t e-file any time you like. There’s a specific range for income tax e-filing. If the IRS isn’t accepting them, you must either wait or use paper forms.
The IRS typically accepts e-filed returns until November of each year. It announces an exact deadline in October.
Understanding the Best Way to File Taxes
Taxes are already intimidating. If you’re running a small business, you may feel even more afraid of messing something up. You don’t want to risk your business because you had incorrect information about the best way to file taxes.
You don’t have to figure it out alone. We’ve got tools and resources for every small business owner. Bookmark our blog to stay educated.