What is Online E-File and How does it work?

Definition: E-file - Electronic File

This is the general term that refers to the process of submitting your income tax return to the IRS electronically as opposed to the traditional method of sending by mail. The electronic file is created for you by an authorized IRS online e-file provider. This is how the process works:

Step 1:

You provide all your relevant personal information to the authorized e-file provider either in person or via the web. You will include all your tax forms such as W2s, 1099s, etc.

Step 2:

The e-file provider takes all your information and does a tax return evaluation either using a standalone software or via the built-in features on the website. Based on the information and the forms you provide your tax return is calculated resulting in a refund or an amount you owe the IRS. This information is provided to you and you have the option to either submit the e-file or not.

Step 3:

If you chose to e-file, then the e-file provider packages your information in a pre-defined format by the IRS and transmits it to the IRS.

Step 4:

The IRS online e-file division checks the package and evaluates it using their own tax evaluation system. Upon completion of this process an Accept or Rejected message is sent back to the e-file provider. This normally takes place between 24 to 48 hours from the moment the e-file is submitted for processing.

Step 5:

If the package is Accepted by the IRS as complete, then there is no further action required by the taxpayer. If it is Rejected by the IRS, then the taxpayer has to make the recommended changes that are made by the IRS and re-submit the tax return to be packaged again by the e-file provider who in turn will re-submit the package for evaluation to the IRS.

And that is Online E-file. It is the revolutionary method of preparing and submitting your income taxes to the IRS. It is fast, simple, easy & secure.

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