Electronic Tax Filing |
| Federal Direct makes both federal and state electronic filing easy by integrating tax preparation with state-of-the-art, on-site electronic filing technologies and taxpayer refund processing. Federal Direct complies with all IRS electronic filing guidelines and reviews all refunds before e-file processing, so you can relax knowing your returns are correctly and efficiently created and filed. |
| Developed by the IRS in the 1980's as a way to automate the processing of individual tax returns, electronic filing has grown over the last 30 years in both size and functionality, making IRS e-filing the fastest, most accurate way to file your clients taxes. |
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What Is Electronic Tax Filing? |
| Electronic tax filing is the process of translating a completed tax return into a computer-readable format for automated processing. This translation cross-checks to ensure return accuracy. After the return is completed, it is transmitted by a licensed transmitter to a regional IRS Service Center. |
| The IRS processes the returns in batches every 12 hours. They return an acknowledgement to the approved transmitter, typically within two hours of starting that process. The acknowledgement provides several items of information including: |
- Acceptance or rejection of the return including a specific reason(s) if the return could not be processed.
- Reduction of the taxpayer's refund due to back taxes, student loans or child support payments owed.
- Inclusion of other useful information to the Electronic Return Originator.
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What Are The Benefits Of Electronic Tax Filing? |
| More Accurate Filing - 99.5% of all electronically filed tax returns are filed accurately, compared to 82% of all mailed tax returns. This error discrepancy is due to two primary reasons, both overcome by e-filing: e-filed returns are corrected in advance of the IRS accepting them; and mailed returns are subject to manual data entry errors, by either tax preparers or IRS employees, that are not caught electronically before being mailed-to and accepted-by the IRS. |
| Although some traditional preparers are reluctant to e-file because they are required to manage IRS acceptances and rejections, long-time e-filers have found the Acknowledgement process helps them serve their customers better and more effectively over time. They indicate the reduced error rate at the IRS Centers also reduced the number of issues identified by the IRS that are not sent back to taxpayers. This reduction of post-filing effort more than compensates for the time spent managing the rejections. E-filers are able to be more profitable because they can charge appropriately for a higher quality service. |
| Speed of the Refund - Taxpayers can receive their refund via direct deposit in 10-14 days, compared to 8-12 weeks for mailing a tax return. Even taxpayers electing to have a refund check mailed receive their checks significantly faster by electronically filing. |
| Acknowledgement that Your Return was Received - The IRS sends an acknowledgement record back to the preparer for each electronically processed return. Mailed returns receive no acknowledgement. |
| Low Cost and Convenience - Preparers can provide customers with service that's fast, easy and affordable. The complete electronic filing process is fully integrated into Federal Direct's tax preparation software so no additional effort is required in order to file a tax return electronically. |
