The newly signed Tax Cuts and Jobs Act (TCJA) may have made huge changes to how your income is taxed, but the choice of how you file your return remains the same. Taxpayers are still allowed to e-file or mail their tax returns as well as choose to get their refund through direct deposit. In addition, you still have the right choice whether to have your return prepared by a tax professional or to work on it yourself.
What is e-file?
Electronic filing also known as e-file is the process of submitting tax returns through the Internet using tax preparation software. The relevant tax authority such as the Internal Revenue Service or the Canada Revenue Agency must pre-approve a software before it can be used by the taxpayers although almost all software these days are qualified. E-filing, a system of tax preparation, increasingly gained its popularity in recent years because the benefits it manifests. Taxpayers these days can not file their tax returns from the comfort of their own homes, whenever they are free and once the tax agency starts to accept returns.
What happens when you e-file?
The tax agency is able to save a lot of time and money with electronic filing or e-filing because the tax data is moved directly into the agency’s computer. It significantly reduces the possibility of keying and input mistakes. For taxpayers whose adjusted gross income for the tax year is $66,000 or less, filing their tax returns can be done directly on the Internal Revenue Service (IRS) through the IRS Free File. Although the IRS has worked with many companies to provide electronic filing to individuals and businesses, it does not promote or approve any specific software for IRS e-file.
Taxpayers have the option to file their tax returns by themselves using a tax preparation software that has e-filing properties or hires the services of tax professionals who also utilizes the software to file an individual’s or business’ tax. The IRS is advising people to only e-file returns by themselves if they are confident and well-knowledgeable in doing their own taxes.
Can everyone e-file?
Electronic filing is not for everyone. If you haven’t been approved to use this system, you must file your tax returns by paper and mail it to the IRS. Here are the following examples of people who do not qualify for e-filing:
What are the pros of -e-filing?
There are several advantages of e-filing. It’s quicker, convenient, and more accurate than filing your tax return on paper. Furthermore, e-filing allows you to check the IRS site for refund updates and will show you the status of your tax return within 24 hours. The difference between e-filing to filling a paper return is that it can take four weeks or longer. The IRS also process tax returns faster when you do it online which results in issuing of refunds more quickly.
In addition to the benefits of e-filing is receiving the confirmation or rejection notice within 24-hours of submitting the electronic documents. If you received a confirmation, it means that the documents have been received and is in process. The rejection notice to the taxpayer, on the other hand, means the return hasn’t been accepted by the IRS. The notice of rejection will state what needs to be corrected on the return to make it acceptable.
Where can you e-file?
You can do your e-file through the IRS’ free file website. Although millions of taxpayers used a tax professional in 2017 there are still a lot of people who prefer filing their tax returns themselves. You still have these choices in 2018 even after the TCJA so whichever method you choose, you can still e-file your tax return.
If you’re ready to get started on your taxes but don’t know how consult the nearest tax professional in your area for a quicker and less-stressful process. If you’re one of those who likes to get the job done with their own hands and likes the challenge of preparing returns, there are websites that you can visit to learn more about taxes and e-filing.
