If you haven’t filed your taxes yet, don’t panic — but act fast.
Have you heard of e-file but aren’t sure how it works? Bankrate explains.
What is e-file?
E-file is an electronic filing system that allows individuals and businesses to file their income tax returns over the internet. In 2016, the Internal Revenue Service (IRS) reported that more than 123 million tax returns were filed online for tax year 2015.
Taxpayers can create physical or digital documents to securely submit to the IRS via e-file. Internet access, standard web browser software, and a registration are typically required to transmit forms. Accountants and other tax preparers can apply to become an authorized e-file provider.
E-file electronic filing is typically available to taxpayers 24/7. Unlike mailing paper returns, e-filing allows tax agencies to immediately issue a refund, and inform taxpayers that the forms were properly completed and that taxes have been received. When taxpayers file tax returns online, they are immediately notified about errors or missing data.
Taxpayers would expect agencies like the IRS to secure their systems, but recent hacking attacks on the IRS website reveal how vulnerable the system can be. In 2016, the IRS reported an attack that successfully exposed more than 700,000 e-file personal identification numbers (PINs). The IRS immediately notified the taxpayers affected by the breach and put additional protections in place to prevent identity theft.
To safeguard their tax returns, taxpayers are advised to take precautionary measures. If they receive email claiming to be from the IRS, it is recommended that they contact the agency directly for verification.
Need help working out your tax returns? Check out Bankrates many tax calculators.
Anastasia has gathered her tax information and purchased a subscription to an online tax preparation service. She is pleased to see that the service utilizes a question-and-answer interface that makes filling out the forms very easy.
After completing her tax return, she electronically signs her documents and the system submits it to the IRS e-file system automatically. The IRS automatically checks Anastasia’s return for mistakes, finds a minor glitch with some numbers, and sends her return back to her. She fixes the problem and sends it right back to the IRS, preventing a simple mistake from holding up her refund.
More From Bankrate
4 min read Apr 19, 2022
Typically, taxpayers have two options: Take the itemized deductions or take the standard deduction.3 min read Apr 18, 2022
Regardless of what may cause a person to miss the tax-filing deadline, there are potential consequences.5 min read Apr 18, 2022
Applying for more time to file your taxes is easy. Just don’t put off paying your tax bill.3 min read Apr 15, 2022
The fast-approaching deadline for filing your 2021 taxes is April 18, 2022.2 min read Apr 11, 2022
There are seven tax brackets for most ordinary income: 10%, 12%, 22%, 24%, 32%, 35% and 37%.4 min read Apr 07, 2022
The credit was confusing even before Congress revamped it for 2021.7 min read Apr 01, 2022
Here’s how to use a Roth IRA to pay for your child’s college tuition.4 min read Mar 28, 2022
This popular tax break can be one of the trickiest.5 min read Mar 24, 2022