IRS e-file
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E-file is a system for submitting
tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
documents to the US
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...
through the
Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
or direct connection, usually without the need to submit any paper documents. Tax preparation software with e-filing capabilities includes stand-alone programs or websites. Tax professionals use tax preparation software from major software vendors for commercial use. Of the 139.3 million US returns filed in 2007, 79.98 million (or about 57.4 percent) were filed electronically. In 2010, a total of 129.3 million US returns were filed, and 93.4 million were filed electronically: in three years the percentage of returns filed electronically increased to 72.3 percent of total returns. In 2018, 89% of tax returns were filed electronically. Taxpayers can e-file free using the
IRS Free File The IRS Free File Program is a service that allows U.S. taxpayers to prepare and e-file their federal income tax returns for free. Through the program, commercial tax software companies that are part of the Free File Alliance offer free tax prepar ...
service, either using an authorized IRS e-file provider's tax software, if eligible, or by using online
Free File Fillable Forms The IRS Free File Program is a service that allows U.S. taxpayers to prepare and e-file their federal income tax returns for free. Through the program, commercial tax software companies that are part of the Free File Alliance offer free tax prepar ...
from the
Free File Alliance The Free File Alliance is a group of tax preparation companies which operate a public-private partnership with the Internal Revenue Service (IRS) to provide free electronic tax filing services under the IRS Free File program to United States taxp ...
. Prior to 2020, the use of a third party was required for IRS e-file, and it was not possible to e-file directly through the IRS website. In 2020, the IRS made direct e-filing possible through IRS Free File Fillable Forms available to taxpayers of any income level.


History

The IRS started electronic filing in 1986 to lower operating costs and paper usage. Since then, additional features have been added. In 1987 Electronic Direct Deposit was added as a form of payment. Milestones have been set and broken throughout the years. In 1990 4.2 million returns were reached and in recent years a record of 1 billion 1040's have been E-filed. E-filing originally used the processing system developed in 1969 by the IRS but, since 2003, the IRS has been developing a new enhanced processing system called CADE.


Types of e-file providers

The IRS accepts electronic submission of a variety of tax forms through their IRS Authorized e-file Providers. The IRS offers e-filing to most forms ranging from 1040's to 2290's to 990's.


Individual returns

Individuals have the option of both free and paid tax software. Recently a feature from the IRS called FreeFile allows users to file their individual tax returns for free. It is also possible to go through an authorized efile company that files Form 1040 with a service charge. FreeFile is free, it's an easy step by step system for those who make less than $64,000 annually and a more task-heavy form of filing for those who make above $64,000. For those who make more than $64,000 a year, the FreeFile is not step-by-step but an actual Form 1040 that can be filled out, box by box, electronically.


Business returns

Businesses and self-employed taxpayers can choose from a variety of commercial e-file services depending on their individual needs. Some of the forms that fall under business returns include Form 2290 (truck tax), Form 1099 (reporting payments to individuals other than employees). IRS has no set pricing for each form, so each filing company sets their own price accordingly. IRS has a list of authorized websites that do e-filing for some forms.


Tax exempt organization returns

Tax exempt organizations may file the annual information return IRS
Form 990 Form 990 (officially, the "Return of Organization Exempt From Income Tax") is a United States Internal Revenue Service form that provides the public with financial information about a nonprofit organization. It is often the only source of such i ...
, Form 990-EZ and Form 990-N with a variety of independent tax software providers. As with the business returns, the IRS does not set prices; each e-filing company sets their own.


Authorized filers

IRS e-filer providers must be authorized by the IRS. The IRS provides a list of authorized e-file providers on some forms. The authorized providers must pass the testing every year. The IRS changes the order of the certified providers list daily for fairness.IRS E-file providers page


See also

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Electronic Tax Administration Advisory Committee The Electronic Tax Administration Advisory Committee (ETAAC) is a panel of the United States Department of the Treasury authorized under the Federal Advisory Committee Act. ETAAC panel members serve as volunteers that are appointed by the Secretary ...
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Electronic tax records Records management, also known as records and information management, is an organizational function devoted to the management of information in an organization throughout its life cycle, from the time of creation or receipt to its eventual disposi ...
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Free File Alliance The Free File Alliance is a group of tax preparation companies which operate a public-private partnership with the Internal Revenue Service (IRS) to provide free electronic tax filing services under the IRS Free File program to United States taxp ...
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Refund anticipation loan Refund anticipation loan (RAL) is a short-term consumer loan in the United States provided by a third party against an expected tax refund for the duration it takes the tax authority to pay the refund. The loan term was usually about two to three ...
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Modernized e-File Modernized e-File (MeF) is an electronic system for filing tax returns with the Internal Revenue Service (IRS) of the United States. The MeF system describes tax forms in terms of XML and supports web-based filing. Modernized e-File was originally ...


References

{{DEFAULTSORT:E-file Internal Revenue Service United States federal income tax Tax software of the United States