Tax Seasons has Started, Its now time for E-filing your tax return

Its that time of year for every American who has tax owed to them. That's right, it's tax season and soon everyone will begin receiving their W2s from their employers. Once they receive this, its a matter of time of receiving their tax return. But what should you do when it comes time to figuring out what method to file your taxes?

The answer... Electronic Filing with BestTaxFiling...

eFiling is the wave of the future. For a few reasons which I have listed below:

1) Save the Tree's - Some wouldn't really care about this small little detail but they should. eFiling saves tree's which of course produce oxygen. If you think about it, with the global warming issue we need as much tree's as possible to cleanse the air.

2) Faster Returns - I am no professional tax preparer so I can't say how fast paper filing returns, but its a well known fact that eFiling generally reports a 2 weeks or less return timeframe. And you can have your money deposited into your bank account which saves having to find a place (or bank) to cash your return check.

3) Accuracy Checks - Some computer software apparently have mechanisms to check the accuracy of your tax return forms. This is usually good to keep from reporting bad information to the IRS that could cost you. Even if TaxAct does clearly state they will pay any penalty fee's for any accuracy issues.

4) Save Money - Once again, please note, I am NOT a professional so the following fact isn't guaranteed. Companies like Jackson Hewitt, H&R Block, etc. usually charge to file your taxes for you. What that rate is I don't know but H&R Block allow you to eFile your FEDERAL taxes for FREE! State eFiling cost's a little bit to do but usually doesn't cost that much. TaxAct charges around $13.95 for each state filing.

5) Get Help from Professionals - Some tax software allows you to receive professional help. Although its supposed to be an automated step-by-step process to completing your IRS tax forms, some people get stuck. Therefore, help is always offered to those who PURCHASE the tax software. TaxCut offers help from any H&R Block branch which is good. If you get stuck you can always call them up for assistance.

So the bottom line is that when it comes time to file your taxes, the advantages of eFiling highly outweigh the option of filing on paper. There are so many more reason's why you should eFile but I figured the 5 items listed above should be enough to make you think twice.

Keep in mind the 5 reasons I listed and how much more effective eFiling is compared to filing on paper. I'd recommend anyone looking to purchase tax software to purchase it directly from the website and download it. That to saves you from having to run out to your local electronics store and picking it up, BUT, only if you have broadband internet access. That's because a majority of the tax preparation software are LARGE files (we're talking 5MB and above.)

The Five Filing Status Possibilities.

Everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

There are two things to consider when determining your filing status:

First, your marital status on the last day of the year determines your filing status for the entire year. Secondly, if more than one filing status applies to you, choose the one that gives you the lowest tax obligation.

Here are the five filing status options:

1. Single. This will generally apply to anyone who is unmarried, divorced or legally separated according to your state law.

2. Married Filing Jointly. A married couple may file a joint return together. If your spouse died during the year, you may still file a joint return with that spouse for the year of death.

3. Married Filing Separately. A married couple may elect to file their returns separately.

4. Head of Household. This generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

5. Qualifying Widow(er) with Dependent Child. You may be able to choose this filing status if your spouse died during 2006 or 2007, you have a dependent child and you meet certain other conditions.

Top 5 Questions Regarding E-Filing A Tax Return.

Over the last few years, there have been several incentives, or even requirements, provided by the IRS and state governments to encourage tax filers to file their returns electronically. Statistics show the percentage of e-filers is on the rise. With tax return deadlines right around the corner, we want to share our thoughts on the questions we receive most often from clients about e-filing.

Top 5 questions I am asked about e-Filing:

5. Do I have to e-file?

No. The IRS does not currently require any tax return to be e-filed, however several states have implemented this requirement. In the past, the state has sent a "reminder" notice that future returns should be e-filed, but have warned that paper returns filed in the future will either be rejected or subject to a penalty. This most likely means that e-filing state income tax returns in these states will be mandatory, and we can anticipate that other states will add similar requirements.

4. Do I have to provide my bank account information?

No. The only time your bank account information needs to be provided is if you would like your refund directly deposited into your bank account, or if you would like your payment directly drafted from your bank account. If you are hesitant to provide your bank account information to government agencies, you can receive your refund by check or if you owe, you can make your payment by mailing in a check.

3. How long does it take to e-file?

Usually a return is accepted by the IRS or state within a few business days of the return being submitted. The acceptance provides confirmation that the return has been timely filed.

2. If I owe with my return, is the payment due when my return is e-filed?

E-filing the return before the due date does not accelerate the due date of taxes. Payments can still be remitted separately any time before the due date of the return, even if the e-file is processed earlier.

Consider the following strategy. If you are due a refund on your state return, but owe on your federal return, then e-file both returns early. You could receive your state refund in time to use it towards your federal payment due. The same holds true if you owe on your state return and are due a refund on your federal return.

1. Why should I e-file?

Here are a few reasons to e-file:

The risk of a return being lost in the mail or misplaced is minimized. Usually a taxpayer is not notified of a missing return until months or even years later. When a return is e-filed, confirmation of acceptance (receipt) by the IRS or state is provided within a few business days.

Paper filed returns are manually entered into the government's system, meaning that an input error could trigger a tax notice.

Part of the e-filing acceptance process used by the IRS and state governments includes a "pre-check" of certain items. In order for an e-filing to be accepted, these items must be correct. This greatly minimizes the chance of receiving a tax notice.

Returns are processed more quickly; if you are due a refund, it will be sent sooner.