4 Helpful Tips for Using the IRS’s E-Filing System

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Feeling a little apprehensive about tax time? You’re not alone. Filing taxes isn’t exactly a process with the best reputation around — but you’ll be happy to know that the IRS has taken a number of helpful steps to make the task far less stressful. Whatever your financial situation might look like, you can simplify some of your filing responsibilities by submitting your taxes online through a process called e-filing. Instead of calculating deductions and signing mountains of paperwork, you can send everything to the correct destination via your computer.

As convenient as e-filing is, the e-file system has terminology and steps that are unique to this method of filing taxes. To make the process of filing taxes electronically as smooth as possible, you’ll want to start by getting the facts about how the system works. Then, it’s time to compile the proper documentation — and get ready for an easier tax season.

What Is the IRS’s E-Filing System?

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As you probably gathered, the IRS now allows many taxpayers to file their taxes electronically via a process called e-filing. There are four different ways to e-file, though, and each one isn’t for everybody. On the IRS website, the IRS itself offers free files and free fillable forms you can use. It also provides links to other companies’ software programs that offer complete free e-filings on behalf of taxpayers who fit certain criteria; many taxpayers opt to e-file using commercial software like the programs from TurboTax and H&R Block. The fourth and final way to utilize the e-filing option is to file through a commercial e-file provider. This is a business, usually online, that allows you to enter tax information on an online form. Then, the business takes that information and e-files it on your behalf for a fee.

Rather than using an email, a fax or another less secure method of transmitting your sensitive financial information electronically, e-filing uses private, secure means to deliver your information to the IRS and complete your filing process. The IRS is able to quickly scan the information for accuracy, which means that it can immediately flag tax returns with errors and send them back to you for corrections. The alternative to e-filing is to mail in your tax returns, and many taxpayers opt for various forms of e-filing because it’s easier and quicker.

E-filing is an option available to taxpayers of all income levels and tax brackets. Although e-filing is a more streamlined process than calculating your tax obligation by hand and mailing off paperwork, it does have a few unique challenges you might encounter. The following tips can help you enjoy the smoothest e-filing experience possible.

Start by Gathering Information

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Depending on the method of e-filing you choose, you may be asked to answer a series of questions that serve to help the e-filing software better understand your financial situation and properly calculate your taxes. This is a marked difference from making a paper filing. When you use paper workbooks and forms to calculate your taxes, you can see the forms’ tables and all of the worksheets or instructions that accompany them.

For your e-filing process to move as quickly as possible, you’ll want to have some key details on hand to answer the software’s questions. Compile all your tax documents, such as W-2s, 1099s and 1095 forms, before you begin so you’re ready to type in the different answers using information listed on these documents. It’s also helpful to calculate any income and expenses that aren’t already listed on a tax form before you start to e-file.

Understand the Difference Between Free File and Free File Fillable Forms

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The second step in enjoying a smoother e-filing experience is to choose the right method of e-filing. Free file is the option to use commercial tax software for free, and this option is available to taxpayers who meet certain requirements. Usually, these are taxpayers who have simple filings and earn less than $72,000 in income. If you earn less than $72,000, you can file both state and federal taxes electronically for free. If you make more than $72,000 but still have simple taxes, you’ll need to pay for your state filing.

Free fillable forms allow you to choose the forms you need, fill out and sign them online, and submit the forms electronically. This is a self-guided process, and it’s always completely free regardless of annual income. The free filing includes more automation, customer service and calculations completed via computer. With free fillable forms, you’re left to make calculations and complete forms on your own, which is helpful if you prefer a more hands-on, self-guided process.  

Create an Online IRS Account

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All taxpayers have the option of creating accounts on the IRS website — you can do so regardless of the type of e-filing you want to submit. This is a great option because it allows you to see how much you owe and whether the IRS has received any payments you’ve made.

You can also view and adjust the address you have on file with the IRS through your secure IRS account. If you’re unable to pay the amount you owe in full, you can use this account to establish a payment plan. To create an account, you’ll need to submit basic personal information, including your Social Security number, and answer identity verification questions.

Pay Properly When You E-File

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Taxpayers who owe money on their taxes have a variety of ways they can pay taxes online. If you’re using commercial software to file, it’ll likely have an easy-to-use payment portal that accepts credit and debit card payments. After you make your payment, the software company forwards the funds to the IRS, along with your tax return, on your behalf.

If you e-file through the IRS website, you can also pay through the IRS website. The Electronic Federal Tax Payment System (EFTPS) allows taxpayers to pay their tax bills online. You’ll need to submit your Social Security number to log in, and this portal also has functionality for scheduling future payments and viewing past payments.

A third option you have is to pay via a same-day wire transfer. The IRS has a printable worksheet you can show at your bank or another financial institution. This form authorizes the bank to make a wire transfer for a specific amount and gives the financial institution the necessary information to properly forward your payment to the IRS.

Although you may file electronically, the option to use traditional means of payment still exists. At the end of your e-filing process, you can view and print a notice that shows how much you owe and what address you’ll need to submit your payment to. This allows you to pay by mailing in a check or money order. The IRS requires that, along with the check or money order, you provide your name, your tax ID, the tax year the payment is for, your phone number, and the tax form or notice that shows how much you owe.

The IRS discourages mailed cash payments. If you do need to pay with cash, you’re encouraged to pay inside one of the IRS’s retail partners. In-person payments are also accepted at IRS Tax Assistance Centers.