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How To File Taxes Online

How To File Taxes Online

Many more individuals and companies are filing their taxes online. There are number of different ways to accomplish this goal either by using tax-preparation software or going directly to the Internal Revenue Service website. Regardless of how you file the benefit should seem obvious as it means getting your tax information to the government sooner, and if you're due a refund, having your refund check directly deposited into your checking account. Some websites which offer the ability to file your taxes online will also go so far as to optimize your tax filing to maximize your refund.

In order to file your taxes online you need to gather together all of your information just as if you were going to file them manually by mailing them to the IRS. By late January and early February you should have access to all of your financial information and tax records regarding earned income, dividends and interest, capital gains and mortgage interest. Once you have all the paperwork in hand, you need to decide what course of action works best for you when you decide to file your taxes online. There are pluses and minuses each alternative so it is important to carefully analyze what options are available and pick the solution which works best for you.

One of the most convenient ways to file your taxes online is to work directly with the Internal Revenue Services eFile system. Once you create an account with the IRS you can put your tax related information directly into an Internal Revenue Service website form which is submitted online and tied directly to your Social Security Number. The eFile system is free for most users as it enables the government to get your information faster, and in the case of owing the government money, receive payment sooner. The Internal Revenue Service also works with many private companies which allows consumers to use their favorite tax-preparation software to also file online.

When using tax-preparation software to file your taxes online there are a few limitations and the service is not available to everyone. The primary limitation is the amount of earned income for the tax filer. For single filers, total earned income must be less than $50,000 in order to file online for free using tax-preparation software. There are additional limitations imposed on joint returns and businesses so be sure to read thoroughly the provided documentation at IRS.gov to ensure you qualify. Even if you don't qualify and there is a nominal fee for filing online it is still worthwhile as it provides an additional record and a notice of receipt which is often better and more secure than filing your taxes via the USPS.

Depending on the tax-preparation software used and where you live it may also be possible to file your state income tax online. Most major tax-preparation software will allow you to file a state return for an additional expense of usually between $15 and $30. Is recommended for most consumers to use tax-preparation software as it not only allows you to submit your returns electronically but will also offer additional tips and suggestions to increase deductions and lower your tax burden. Regardless of how you file, be sure to print out a hard copy of your tax return as well as saving electronic version in PDF format. This is because it is recommended to save your tax returns for a minimum of seven years in case the IRS conducts an audit and reviews your back taxes.

There are many different ways to file taxes online, some of which are free and some which are not, but regardless of whether or not you go directly to the IRS website or use tax-preparation software the benefits should be obvious. Modern technology and the Internet has made filing taxes online an easy process. It is much less prone to error than filling out printed forms and mailing them to the government. If you have any additional questions or would like more information on how to file taxes online be sure to visit IRS.gov as there is a large amount of information available to taxpayers.