Filing taxes online can be a fast and simple alternative to filling out traditional paper tax forms and submitting them by mail. Taxpayers can file taxes online on their own, or with the assistance of a tax professional.
Choosing an online filing method
The Internal Revenue Service (IRS) offers a service called "e-file" for filing federal taxes online. Individuals as well as corporations, partnerships, estates, trusts and exempt organizations may file taxes using e-file. The IRS maintains a searchable list on its official website of tax professionals who are authorized to participate in the e-file program. The services offered by these professionals may be either free or fee-based; fees vary by company and by the services offered. Additionally, those who wish to file taxes with e-file can purchase or download IRS-approved tax-preparation software to guide them through the process step-by-step.
Free File, a partnership between the IRS and private tax software, provides tax forms that may be filled out and submitted electronically for free through the IRS's official Free File web page. 1040, 1040 A and 1040EZ tax returns may be prepared and filed through Free File.
The process of filing online is very similar to filling out traditional paper returns. You will need all W-2 and 1099 forms; receipts for itemized deductions; social security numbers for yourself, your spouse and your dependents; and your bank account information. Depending upon which e-file method you use, you will either submit your tax information to a website or use software to aid you in filling out and submitting tax forms electronically. The electronic forms will be identical or very similar to the standard printed forms.
Taxpayers participating in Free File or another e-file program generally receive their tax refund in less than three weeks from the time of filing. This is about half the time compared to filing taxes by mail. Many e-file programs automatically input amounts from tax tables and calculate totals, which cuts down on the chance of human error. When used correctly, e-file has an error rate of less than 1%.
Filing state taxes online
Thirty-seven states, plus the District of Columbia, participate in the IRS's Federal/State e-file program, which allows state residents to file their state taxes as well as federal taxes online. The IRS's official website maintains a list of participating states. If your state does not participate in the e-file program, check the website of your state's Department of Revenue to see if your state offers a different program for filing taxes online.