Personal Computer
Instead of using the services of a tax professional, you can quickly and conveniently e-file your return using a personal computer. To do this you can:
- Purchase commercially available software,
- Download software from an Internet site and prepare your return offline, or
- Prepare and file your return directly with a service online. Some vendors offer websites to complete your entire return online and then transmit it.
Note: The IRS cannot compete with private enterprise and does not offer free e-file software or direct filing. A number of companies, tested and approved by the IRS, do offer free use of their software and free filing, while others will charge nominal fees. Terms and conditions vary among companies and you are advised to review the information on each company’s website and choose the product that is appropriate for you.
Who can file using a personal computer? Anyone is permitted to use this method of filing, and the method is not limited to a computer. Software and applications are available to enable other electronic devices to help you file your return. Access to the Internet through a personal computer or other device is necessary. Software can be purchased, downloaded from the Internet, or accessed online.
Using this method, you prepare your tax return on a personal computer or other device and transmit the information to the IRS. You can generally transmit up to five returns using tax preparation software, which enables you to prepare returns for family and friends with the same software and computer used for your return.
To actually e-file your return, the tax preparation software first converts your tax data into a format that meets IRS specifications and then transmits the electronic file to the IRS. The IRS checks the return and notifies the transmitter (who then informs you) whether the return has been accepted or rejected. If your return is not accepted, the electronic return transmitter will provide you with customer support to correct your return and resubmit it.
Signing your return. You can sign the return using the Self-Select PIN if you meet the eligibility requirements described earlier in this chapter. If you do not meet the eligibility requirements, you will need to electronically authenticate yourself using other information, such as your prior-year Adjusted Gross Income (AGI). Following the completion of your return, you should retain copies of your return and all items used in preparation (including documentation of signing of the return by you and, if applicable, your spouse) and copies of any documents sent to the IRS. Generally, the requirement is to retain these documents for at least 3 years after filing for federal purposes, but some states require 4 years of retention. Many advisors suggest maintaining the e-filing documents for 7 years, which more than meets the current requirements for any jurisdiction. Remember to retrieve any documentation that you may need in the future (such as real estate closing statements) when you purge your tax information for a tax year.
Extra fees for e-filing a tax return from a personal computer. The IRS does not charge a fee for e-filing using a personal computer or other devices. However, an electronic return transmitter offering this service to taxpayers may charge a fee for transmission. Check out the IRS e-file Partners or Online Filing Software Companies listed at www.irs.gov to learn about free and low-cost e-file opportunities.
Payment methods and refunds. The same payment methods available by using a tax professional are available with e-filing from a personal computer (see above). Refunds should generally be in your savings or checking account within 2 to 3 weeks if you choose direct deposit or in 3 weeks or more if you choose a paper check. If you combine e-file with direct deposit, you could receive your refund in as few as 10 days. Be sure to verify the refund methods available from your state and choose the option best for you before transmitting your state return. Some states have a longer wait time than others to issue refunds.
If you have additional federal questions, you may contact the IRS’s toll-free customer service at 1-800-829-1040. As tax deadlines approach, be prepared for lengthy hold times.
IRS Free File
This program began in 2003 and is a popular e-filing method.
Through a public-private partnership between the IRS and the tax software industry (i.e., Free File Alliance, LLC), you may access free online tax preparation and electronic filing services through www.irs.gov. Eligible taxpayers may prepare and file their federal income tax returns using online software provided by the Free File Alliance companies—not the IRS.
Once in the IRS website, you can select the best match for you from the Partner’s offering or use a “help me” tool to narrow your choices, then click on “Continue” to be directed to the Partner’s website to begin your tax return safely and securely. You will need to have your email address, copy of your prior year’s tax return, as well as documents for your income and deductions.
The partnership agreement calls for the Free File Alliance to provide free tax preparation and filing to at least 70% of all taxpayers. Each participating software company has its own eligibility requirements, but none offer Free File to taxpayers with an adjusted gross income of more than $60,000.
The difference between Free File and the first two methods is that the entire filing process must take place online—there is no need to visit a tax professional or purchase or download software. You just input data while you’re on the provider’s website to complete your return. It saves time and it is easier to track your refund.
Privacy and security concerns. Your tax information and data will be protected when using a software provider’s website. To ensure your data’s safety, the IRS requires participating companies to obtain both privacy and security seal certifications. These certification programs, administered by third-party providers, certify your tax return information is protected from unauthorized access during the tax preparation process. Be sure your personal computer is protected by installing and updating antivirus software.
In addition:
- Tax return preparation is accomplished using proprietary software approved by the IRS; transmittal is through the established IRS e-file system.
- Alliance companies must comply with all federal rules and regulations on taxpayer privacy for paying and free customers. These rules prohibit use of tax return data for purposes not specifically authorized by the taxpayer.
- The IRS meticulously monitors the progress of each of the companies. If any problems develop, the companies are required to alert the IRS. If appropriate, the IRS will remove the company from the www.irs.gov website until the problem is resolved.
For more information, you should visit the company’s privacy and security policy located on the company’s website.
Step 1. How to get started
- Begin at the IRS website (www.irs.gov) and choose “Free File.”
- Click on “Start Free File Now.”
- The program can also be accessed through the IRS website at the following address: http://apps.irs.gov/app/freeFile
- The IRS Free File page is where you may begin your search for a Free File company.
Step 2. Determine your eligibility: You must first determine your eligibility for using a particular company. Each company has a simple description of its eligibility criteria for using its free service.
Step 3. Link to Free File company service: After choosing a company, click on the company’s name, which sends you directly to the company’s website (you will be notified you are leaving www.irs.gov and being sent to a commercial website). Follow the instructions on that company’s website to begin the preparation of your tax return.
Alternatively, if you are having trouble choosing by scanning the list of Free File companies, you may want to use the interactive help tool. Choose “Free File Software Lookup Tool” at https://apps.irs.gov/app/freeFile/jsp/wizard.jsp to narrow down the possible companies offering free preparation and e-filing for you. Answer the questions on the website and click “Continue.”
If you are uncertain about your answers to these questions, you may want to view the complete list of companies and their services. The accuracy of the results is dependent on the accuracy of the information you provide in the tool.
Step 4. If you do not qualify for the selected company’s free offer: You may want to check other Free File company offers by accessing the www.irs.gov Free File page. If you are on the company’s website, look for the link that takes you back to www.irs.gov and search for another Free File service. Go back and scan the listing of free company services as described in Step 3.
If you do not qualify for the company’s free offer but continue with the preparation and e-filing process with this company, be aware you will be charged a fee for preparing and e-filing your federal tax return.
Example. If you select a company whose free services are provided to individuals with an adjusted gross income (AGI) of $60,000 or less and, based on your tax data, the company determines your AGI exceeds the $60,000 limit, you will be notified that you will be charged a fee. It is important that you understand each of the company’s eligibility criteria (which can be reviewed at the IRS Free File page as discussed above) before selecting a company. You may find the fee for returns not eligible for Free File on each company’s website along with additional details of the company’s offer, such as fees for state tax returns, if any, and a listing of tax forms the company supports. Access the company’s website directly from the IRS Free File page by clicking on the company name (you will be notified you are leaving www.irs.gov and being sent to a commercial website).
Step 5. Prepare and e-file your federal income tax return on a company’s website: The company’s software assists you to prepare and e-file your income tax returns using proprietary processes and systems over the Internet. Electronically filed returns are transmitted by the company to the IRS using the established e-file system. An acknowledgment file, notifying you that the return has been either accepted or rejected, is sent via e-mail from the company.
Refunds and payments using Free File are handled the same way as they are for the other e-filing options.
Free File Fillable Forms. The IRS has a program called “Free File Fillable Forms.” This program opens up free online filing to everyone regardless of income level by providing the online equivalent of a paper return. All forms needed to prepare and electronically file your federal income tax return are available (state return forms are not available). The program can be accessed through the IRS website on the Free File homepage or at the following link: www.freefilefillableforms.com/#/fd.
Once you access the program, you may select the federal income Free File Fillable Forms and schedules you plan to submit, fill in the tax data, perform basic mathematical calculations, sign electronically, print for recordkeeping, and e-file your return. Most federal forms are available and can be used by 1040, 1040A, or 1040EZ filers. Please note that this program does not include questions or guidance that could assist you in the preparation of your return. Free File Fillable Forms is most helpful to those who are familiar with the tax law, know what forms they need to use, and do not need assistance to complete their tax returns. If you are not comfortable with this method, you may want to access the www.irs.gov Free File home page and check out the list of companies that offer free tax preparation assistance and e-filing services via the Free File program explained previously.