Basics of E-FilingWhen e-filing (electronic filing) was first introduced, only the less complicated tax returns qualified. This led to the general public’s perception that e-filing was for short forms with refunds. Since then, e-filing has matured to the point that even the most complicated returns can be electronically filed. It also offers the following advantages to taxpayers: A refund can be received much faster. The risk of a check being lost or stolen is minimized. The IRS (and state, if applicable) no longer needs to keypunch your tax return data, avoiding input errors and some costs at the government return processing centers. Proof of filing is provided. There is no longer the expense of mailing returns. If money is owed, a taxpayer can still file early and delay payment until the last minute. A complete paper copy of your tax return is still provided. In short, e-filing simply replaces the paper-filed return with a return that is electronically filed. There is no sacrifice on your part in quality or service provided by this firm. Authorizing TransmittalBefore your return(s) can be electronically transmitted, you must first provide our firm with written authorization. You will need to sign one of two authorization forms, which will be provided to you after your return has been completed and reviewed and is ready to be filed. Form 8879 – Except in unusual circumstances, Form 8879 will be used. It is used when all forms and schedules on your tax return are acceptable for electronic transmission and provides for an electronic signature (as explained below). To use Form 8879, the taxpayer must be at least 16 years of age. Form 8453 – Occasionally, your return will include a form or schedule that is not acceptable for electronic filing and that particular form must be paper filed. This is usually encountered when one or more of the forms being transmitted requires an original manual signature. When this is the case, Form 8453 is used to provide the authorization. Once the acceptable forms of your return have been electronically filed, the forms that must be paper filed are mailed by your tax professional to the IRS with Form 8453 within three business days of receiving IRS acknowledgment that the return has been accepted. Your Electronic Signature Paper-filed tax returns must be signed by the taxpayer or both taxpayers in the case of a joint return. When all forms and schedules of your return are electronically transmitted (see Form 8879 above), a physical signature is not possible. Instead, your Personal Identification Number (PIN) is used as your electronic signature. You and your spouse, if filing a joint return, establish your individual PIN at the time you sign the authorization for your return to be electronically transmitted. The PIN can be any randomly selected five-digit number so long as it does not begin with a zero and is only used to tie your physical signature on the authorization to the transmitted return. There is no need on your part to record or remember the number and you can use a different number each time you file. Options for Receiving Refunds If you are entitled to a refund and do not have other outstanding liabilities for prior year taxes, past due child support or student loan payments, you have the following options for payment of your refund amount: Direct Deposit – The refund is generally deposited into your specified savings or checking account within 21days after the return has been electronically received, and the time is often less than 21 days. Taxpayers who use direct deposit for their federal refunds are able to divide their refunds and make deposits into a maximum of three different financial accounts. Issued a Check – If a direct deposit account is not specified, then the refund amount will be paid by a check. This is generally issued within 21days after e-filing is completed, compared to the 6 to 8 weeks it usually takes to issue a refund when a paper return is filed. Applied to Subsequent Year – Any portion of your refund can be applied to next year’s estimated taxes and the balance paid to you by check or direct deposit. Options for Paying a Balance DueIf a balance is due on your return, the return can be electronically filed and the balance due on your tax liability can be paid using the following options: Check Payment – A payment voucher will be provided with which you can make a payment at any time up to the unextended due date of the return (generally April 15) without incurring late payment penalties. Direct Debit (Electronic Withdrawal) – You can pay by direct debit at the time the return is filed or specify any date up to and including the last day for filing returns (generally April 15) for an electronic withdrawal from your bank account. Example: Your return could be e-filed in March and you can specify that the debit be made on April 10 (or any other day on or before the return due date). You do not have to remember to do anything at a later time. CAUTION! Taxpayers should first check with their financial institutions to verify that such payments can be made. In addition to your tax return balance due, direct debit can be used to make extension payments and certain estimated payments. Electronic Federal Tax Payment System (EFTPS) – If enrolled in this system, you can pay your federal taxes on the Internet or by phone 24/7. If you make more than one tax payment per year, such as estimated taxes or payments on an installment plan, you may find this system especially convenient. Enrollment can be initiated via the Internet at EFTPS.gov, but because initial enrollment confirmations are sent by mail, you’ll need to plan ahead to get set up in the system if you want to use it to make a payment on April 15. Direct Pay – If you haven’t used the direct debit feature when you e-filed, you can use the IRS’ Direct Pay service to pay your tax bill or make an estimated tax payment directly from your checking or savings account at no cost to you. You do not have to sign up in advance, but you can’t pre-schedule multiple payments as you can with EFTPS. Go to the IRS web site to use this feature: http://www.irs.gov/Payments/Direct-Pay Lack of Funds – Even if you do not have the funds available to pay what you owe, you must still file your return on time to avoid certain late filing penalties. Should this be your situation, we can file an application for an installment payment plan. Selecting a Bank AccountAre you hesitant about utilizing the automatic deposit, Direct Pay or direct debit option because you are concerned about providing the IRS with your account numbers? Keep in mind, the IRS already has most of that information except for non-interest bearing accounts, provided to them from the banks via the annual filing of 1099s. Generally, deposits and debits can be made to National and State Banks, Savings and Loan Associations, Mutual Savings Banks, and Credit Unions within the United States. Account types include savings, checking, share draft, money market accounts, etc. Refunds may not be direct deposited to credit card accounts.