How to file your taxes online

2023-01-18

Key Takeaways

• Filing taxes online provides an easier, safer, and quicker way to complete your return.

• Not only does tax software stop most mistakes, it allows you to import previous tax information to speed up tax return preparation for the current year.

• 90% of American taxpayers choose to e-file their returns each year.

• Mailed in paper tax returns can take up to six weeks or more to process.

Do I have to file taxes?

Filing taxes will depend on your income, tax filing status, age, and other factors. Generally, you don’t need to file a tax return each year unless your total income exceeds certain thresholds, or you meet specific filing requirements.

Usually, if your income is less than the standard deduction, you don't need to file a tax return. However, you may still need to if you meet certain conditions in 2022. You don't need to file a tax return if all of the following are true for your situation:

Under age 65
Don't have any special circumstances that require you to file (like earning self-employment income)
Earn less than the 2022 standard deduction for your filing status

If you don’t meet all of these conditions, you may need to file a tax return. Even if you do meet all of these conditions, you may want to file a tax return anyway. If you have federal taxes withheld from your income, you can only receive a tax refund when too much is withheld.

For example, suppose your filing status is single; you can’t be claimed as a dependent by someone else, and you had $600 of federal tax withheld from your $5,000 of earnings as an employee during the year. You likely can get that money back since you earned less than the standard deduction. However, you can only get it by filing a tax return to claim a refund.

The IRS doesn't automatically issue refunds, so if you want to claim any tax refund due to you, you should file a tax return.

If you need to file your taxes, the easiest way is to file online.

How to file your taxes

Whether you're filing your taxes for the first or the 50th time, it's always a good idea to gather your tax information early so you can prepare your return and file faster.

The IRS offers two methods for filing your taxes: electronically (called E-filing) or through the mail. E-filing has grown to be the most popular method to file, representing over 90% of all returns received by the IRS for 2020 tax returns.

The IRS has stated that e-filed returns are more accurate and they avoid processing delays and speed up refund delivery. Despite this, roughly 10% of the population still chooses to file taxes the old-fashioned way: through the mail.

Regardless of your preference for filing your taxes, the basic process is the same:

Gather the documents you’ll need to file your taxes
Calculate your taxable income by tallying your gross income
Claim all applicable tax deductions and credits
File your tax return with the IRS.

Below breaks down each step necessary for filing taxes online, starting with the forms you need.

What tax forms do I need for online tax filing?

Consider creating a folder for your tax return at the beginning of a tax year. Then, put any important tax information you receive in that folder until you're ready to file your tax returns.

Most of these forms will show up after the end of a tax year in January or early February. However, some forms may show up even later. It's important to wait until you receive all of the forms you're expecting before you file your tax return or you may leave out an important item. Once you have all of your forms needed to prepare your tax return, consider working on it sooner than later as there are good reasons to file your tax return early.

Common forms to look out for include:

Form W-2, Wage and Tax Statement
Form W-2G, Certain Gambling Winnings
Form 1099-DIV, Dividends and Distributions
Form 1099-INT, Interest Income
Form 1099-MISC, Miscellaneous Income
Form 1099-NEC, Nonemployee Compensation
SSA-1099, Social Security Benefit Statement
Form 1099-G, Certain Government Payments
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Schedule K-1, Partner's or Shareholder's Share of Income, Deductions, Credits, etc.
Form 1098, Mortgage Interest Statement
Form 1098-T, Tuition Statement
Form 1098-E, Student Loan Interest Statement

These forms might be mailed to you or you may be able to access them online. If you haven't received your W-2, check with your employer, or even with the IRS. Some online tax filing software can import your W-2 electronically and even notify you when your W-2 is available.

Check your tax information from last year to see if you received the same forms this year. If you're missing something, check to see if you no longer need that information. For instance, you won't receive a Form 1099-INT if you closed your bank account that issued it last year.

Additionally, you may experience new situations during a tax year. You'll have to make sure you think through the year to determine if your new tax situation may lead to you receiving new forms this year. If so, make sure you keep an eye out for them. For example, if you opened a brokerage account or started trading crypto then you should expect to have forms for these activities.

How do I do my taxes online?

Each year, you can choose how you want to prepare and file your taxes. You can do so in one of three ways:

Preparing the tax forms by hand and mailing them in.
Using online tax software to prepare the required forms through on-screen prompts and guidance.
Hiring a tax professional to handle it for you (some online tax software comes with tax professional assistance).

If you file with the latter two options, you can choose to e-file your taxes. Using tax software allows you to do your own taxes and file online.

When you use online tax software, you can enter your information the first time you use it and have this roll forward each year. This allows for an easier and quicker experience preparing your taxes each year, leading to less stress and quicker refunds if you’re owed one.

Filing your taxes starts with gathering all the documents you need to prepare your return, such as the forms covered above. To speed up this process, consider keeping all of your supporting paperwork for your taxes in a single and secure location. This helps to keep your tax documentation organized and easily accessible when it comes time to prepare your taxes each year.

Once you have this information ready, you can enter it into the online tax platform. You can do this manually or see if the online tax software offers the ability to import your tax returns. If you can automatically import this information into your tax software, it could save you even more time and can help prevent entering incorrect information on your return. Tax software integrates with several businesses and organizations to import digital versions of your tax information which then gets placed in the appropriate boxes, lines and sections on the correct forms.

After entering your information, tax software works in one of two ways:

Interview-based tax software: This interface has you answer questions prompted by the software. The interview will gather information from you and place these details on the relevant forms automatically, making it easy to use if you aren’t familiar with all the forms used to prepare your tax return.
Form-based tax software: This software requires you to know about the tax forms used to prepare your return. It'll step through each form and require you to place the correct information from the corresponding boxes on your tax documents.

With interview-based software, you are navigated through each part of your return, starting with questions to learn about you and determine your tax situation. If this is your first time using the software, initial questions ask for personal information about you and any dependents. If you’ve used this software in the past, it'll ask you to confirm your information and ask if you’ve had any changes in your tax situation since you filed your last tax return. Depending on your answers to these questions, the software will assist you with selecting the most relevant tax filing status.

Next, the software will ask you for income figures from all sources during the tax year before proceeding to claim your eligible deductions and credits. The software may have the ability to automate much of this process through importing tax documents and automatically placing this information in the appropriate places on your tax return.

From there, you should review your return for accuracy. Afterward, you’re ready to file your taxes online.

What are the benefits of filing taxes online?

Using online tax software has several benefits. Not only does it simplify your tax return filing, you can file it more securely with e-File, enabling you to get your refund faster should the IRS owe you money.

Fewer mistakes. When you file taxes online with tax software, you substantially reduce the likelihood of making errors as compared to preparing your returns on paper. The automated nature of tax software works to prevent simple arithmetic errors and also places information in the correct boxes and on the correct forms. This reduces the chances of filing an inaccurate return. Further, if you make a mistake on your return, such as claiming a dependent who has already been claimed, or entering an incorrect Social Security number, the IRS can detect it quickly. They'll send back an error report in as little as a few hours so that you can quickly fix the problem.
Quicker, more accurate preparation. Filing taxes online with tax software can also pull information from previous returns, such as any carry over losses, passive activity losses, information for calculating underpayment penalties, and more from a prior year. You can automatically import relevant tax information for your current tax return, allowing you to get the job done a lot faster than if you prepared your return by hand. Plus, you don’t lose track of these important items that might benefit you in the current year, potentially saving you more money on your taxes.
Faster refunds. The IRS handles e-filed returns faster than paper returns. Your e-filed return processes quicker and goes through an error checking system much sooner than a paper return. If you prepare your own return and send it by mail, you can expect to wait up to six weeks or more for your refund. Because the IRS can review your return quicker, you get your refund deposited directly into your bank account faster. You can also elect to receive your refund in the mail if that is what you prefer.

Can I import tax forms?

Online tax software has streamlined the ability to prepare your tax return by having you input your unique tax information through intuitive question and answer prompts, on-screen guidance, access to a tax professional, and convenient e-filing with the IRS.

Tax software allows you to import your tax information directly onto your return without needing to handle physical forms or manually enter the data.

You can import tax forms like:

W-2 from your employer
1099-B, 1099-DIV, 1099-OID, 1099-INT or 1099-R forms from brokerages where you invest or institutions where you bank
1099-NEC forms from companies you work for as a self-employed person
1099-MISC forms for non-employment related payments or income

TurboTax Tip: When selecting the financial institution for importing your tax forms, be sure to select the right company from the list. For example, several participating partners' names may start with First National Bank. Select your specific bank to ensure your details can be found.

By integrating with these companies, tax software can import your tax forms directly, reducing the time needed to prepare your return while also resulting in fewer errors.

What should I expect when filing taxes online?

Filing taxes online should be a quicker process than completing your return by hand. If you have a simple tax situation, you shouldn’t expect to spend a long time preparing your tax return.

For example, if you only have W-2 income and claim the standard deduction, your tax return shouldn’t take long to prepare, review, and e-file.

On the other hand, if you have a more complex tax situation, you may still need to enter a good amount of data manually, especially if you are itemizing your deductions or claiming certain tax credits.

For example, if you have several investment and bank accounts, work for yourself, have rental property, claim tax credits, or need to account for the Alternative Minimum Tax (AMT), your tax return may take a while longer to prepare.

Tax software can assist with handling these finer details and also provide objective explanations on the impacts of taking certain tax positions. Should you need help, several tax software packages offer to connect you with a qualified tax professional to answer questions, guide you through preparing your return, and check for any missed deductions or credits you might qualify for.

How do I pay my taxes online?

Paying your taxes online is straightforward and easy. If you file your taxes by hand, the amount owed on your return can be submitted online directly to the IRS through its Direct Pay web portal.

The portal allows you to pay online or over the phone with a bank account for free or by debit card, credit card or digital wallet for a fee.

The IRS offers you the ability to submit payments for the following returns through Direct Pay:

Tax Form 1040
Form 1040 Health Care payments
Form 1040ES (Estimated tax)
Form 1040X (Amended Return)
Installment Agreement
Form 4868 (Extension to file)
Form 5329 (Additional taxes on qualified plans)

You can also submit payment through your online tax platform. Depending on the provider, you may be able to pay by:

Direct debit from your bank account (free)
Credit or debit card (convenience fee)
Check or money order (free except for postage)
IRS Installment Agreement (this may be free or have a fee, depending on your circumstance)
Cash (at a retail partner)

How do I get my refund?

The fastest way to get your tax refund is through filing an accurate return electronically using direct deposit to your bank account. When you file electronically, the IRS will provide a status of your tax refund within 24 hours of e-filing or within four weeks after you’ve mailed your return.

To check your status, you'll need to provide your Social Security number or Individual Taxpayer Identification Number (ITIN), filing status, and exact refund amount. You can gather this information from your completed tax return.

When you file, you can provide bank account details to have your tax refund securely direct deposited. You can also opt to have a paper check mailed to you.

How long does it take to file taxes online?

On average, the IRS estimates it takes individuals 13 hours to complete their tax returns each year. Of course, the time it takes to file your taxes depends on your unique tax situation, preparedness and familiarity with your information.

More complex situations can entail additional forms and questions you’ll need to answer on your tax return, such as if you:

place trades in taxable investment accounts,
transact in cryptocurrencies,
own rental real estate,
work for yourself as a self-employed person
become subject to the alternative minimum tax

Each additional situation can add more time to prepare and file your taxes online.

Just the same, simple tax situations often take less time to prepare taxes and file online. For example, if you only have W-2 income from your employer and claim the standard deduction, your tax return won’t take as long to prepare. It can take as little as several minutes to complete with the right forms and information readily accessible to you and your tax software.

When you use tax software, it asks you all the questions necessary to capture your full tax situation, perform the required calculations, and enter the correct information on the relevant tax forms.

Filing online can also reduce the likelihood of arithmetic errors, lowering the chance of needing to file an amended return if there’s an error on your return.

What is the fastest way to file taxes?

The fastest way to file taxes is online. IRS’s e-file system enabled 122 million taxpayers to file their returns electronically last tax year. According to the IRS, e-Filed returns not only offer better accuracy. They also provide better security and faster refunds.

By avoiding the mail to send in your return, they can process your return faster, check for errors, and issue most refunds in less than 21 days. The fastest way to get your refund is by using the automation and error reduction benefits of tax software, e-filing and direct deposit. Combined, these will give you the best shot at filing your taxes fast and getting your refund sooner.

Let an expert do your taxes for you, start to finish with TurboTax Live Full Service. Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted.

File your own taxes with confidence using TurboTax. Just answer simple questions, and we’ll guide you through filing your taxes with confidence. Whichever way you choose, get your maximum refund guaranteed.

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