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There are many benefits to this form of tax return filing. For one thing, you will not be alone. According to the IRS, over 70 million taxpayers filed electronically in the 2006 tax year. Wow! And, that number is expected to increase. What makes this method of filing tax returns so popular?
You do not have to fill out the paper tax returns. This can save a lot of time. Some taxpayers, however, find the electronic filing process goes easier when they do have a paper income tax return and applicable tax forms on hand. The information is taken from the applicable return and forms then inputted into the tax preparation software. However, if you simply have a W-2 and just a couple other tax forms, you might like to just directly input the information into the online filing software.
You do not have to collate a paper tax return. This means, you can simply staple together all the attachments to your tax return. You are not required to put them in order to avoid IRS oversight or penalties.
Your math is double-checked along the way. A good electronic filing program will have a double-check system in place. If there is any information that does not add or deduct properly, it will tell you something is wrong.
You are informed of any missing information. If you do not put in your withholding allowances or exemptions, social security number(s), or applicable deductions, you will receive an ‘incomplete information' message. Missing information can also be you claiming a tax credit without any corresponding qualifications, as an example. Once again, this will require you to correct it before you are allowed to move forward.
It is convenient. You can easily sit at home and submit your tax return or have someone else do it. All that is needed is a computer with Internet access.
It is secure. The IRS website is encrypted so that all information transmitted to and from it is secure and safe from hacking. When you submit any information to the approved service providers, it is converted to the file format specified by the IRS. Then, it is transmitted to the IRS.
Fast refund. If everything is submitted properly on your return, you will receive your tax refund in half the time as a paper filed tax return. This time is even quicker if you choose direct deposit as the method for receiving your tax return.
Acknowledgement. Many times upon completing the submission process, the service provider will provide you with an acknowledgment receipt. This note states that your return was successfully submitted. Keep this copy for your records.