Gone are the days of filing your taxes with pencil and paper and struggling to understand what the form is asking for. These days, doing your taxes online with e-file is not only easier, but much safer than filing them manually. In fact, the internal revenue service encourages you to electronically file and reported this month that self-prepared e-filed tax returns from home computers were up 7.5 percent from last year.
For those who are still on the fence about joining the millions of Americans who choose to do their taxes themselves and e-file their tax returns, here are some of the advantages:
Save money. There are 60 million taxpayers with simple tax returns, and some of them are spending valuable time and money to take their taxes to someone to be prepared -- when they can prepare them easily and accurately themselves for free. You can save up to $100 if you choose to do your taxes yourself with tax software versus going to a tax store. Even individuals who are not eligible to file for free can save a considerable amount of time and money doing taxes online themselves.
It's easy. You don't have to be afraid to deal with your taxes, since good tax software is very user friendly and intuitive. In fact, you don't need to know anything about the tax code. Tax software will ask simple questions about your life and provide the tax deductions and credits you're eligible to receive. Tax software can also eliminate extra work because if you used the same tax software before, it can transfer relevant information from previous returns.
File from anywhere. Doing your own taxes online will not only save you time and money, you can conveniently do your taxes in the comfort of your own home. Even if you're snowed in, you don't have to go out and weather the storms. You may even be able to file your taxes on-the-go in minutes using your smartphone. There are a number of apps available to help with taxes, such as TurboTax SnapTax for e-filing, or the IRS2Go app, an official app from the IRS that allows you to track the status of your refund after you've filed.
Gain financial knowledge. As with other kinds of do-it-yourself activities, doing your own taxes makes you more knowledgeable about your finances and can get you thinking about more ways to save money. Online tax software shows the tax credits and deductions you're eligible for and may encourage you to think about what you can do in your everyday life to receive valuable tax deductions and credits in the future.
Ensure greater accuracy. Filing online takes the guesswork out of the tax return process, since many programs do the calculations for you. When you e-file your tax return you will also receive a notice from the IRS right away for mistakes such as submitting the incorrect Social Security number for yourself, your spouse or dependents. When you use online tax software, it's like working with your own personal guide who will hold your hand and walk you through, step by step, so you get all the possible credits and deductions you deserve.
Receive faster refunds. There's no faster way to receive your tax refund if you file your taxes online and use e-file with direct deposit. The IRS reports nine of 10 taxpayers will receive their refunds within 21 days or less. With snail mail, you don't even know if the IRS received your tax return.
There are many advantages to filing your taxes online with e-file, and it doesn't have to be overwhelming. With all these benefits in mind, you might want to reconsider spending time driving somewhere to get your taxes prepared or ever mailing your taxes again.
Lisa Greene-Lewis is a certified public accountant and TurboTax tax expert. She has more than 15 years of experience in tax preparation, including positions as a public auditor, controller and operations manager. For more tax-related tips, go to blog.turbotax.intuit.com.