Preparing and filing a federal or state tax return can be a challenge if you are inexperienced or if you have a relatively complex tax situation.
Although many people use the services of tax professionals, this option may be too extensive or costly for single filers.
Tax software offers an affordable solution to this problem.
It allows taxpayers to prepare and file their returns themselves while saving time and eliminating mistakes.
There are many tax software solutions available, however, and you should choose one that is the most suitable for your tax situation.
E-file is a low-cost tax software that offers filing services for federal and state taxpayers. Note that E-file is not the same as the IRS’s general e-filing process.
In the article, we’ll be taking a look at E-file, how its interface works, and some of its features, benefits, and drawbacks.
Continue reading to learn more.
Here’s How E-file Tax Software Works
When you use E-file to prepare and file your taxes, you will have to answer a series of questions before filling out each section.
The software will use your answers to determine your unique tax situation before presenting you with the necessary forms and schedules that you have to complete.
If you have some experience with filing your tax return with software and know which forms you need, you can skip the questions to save time.
The interface has fewer features than you can expect to find with some of the higher end products.
Some people may prefer this simplified design as it navigates you through the return preparation and filing process without providing you with too many options, which reduces the risk of overwhelming and information overload.
If you are eligible for 1040EZ filing, you will be able to go through the entire tax filing process within fifteen minutes.
An accuracy guarantee is a feature that E-file and most of its competitors have to offer.
Here’s what that means: if there is a calculation error on your return as the result of a software glitch, E-file will accept responsibility for any issues that the IRS may have.
Prior Return Importing
If you filed your previous tax return with E-file, you would be able to import the tax return of the prior year directly to the return you are preparing for the current year, which can save time and eliminate the risk for mistakes.
You will not be able to import your W-2 form or tax return from competitor platforms, however.
Pay with Your Refund
If you use E-file to prepare and file your tax return, you can pay for their services with your tax refund without having to provide your credit card information.
To pay with your tax refund, you will have to pay a fee of $19.
You can opt for Audit Support, an add-on feature, with any of E-file’s plans.
This service is free and includes comprehensive assistance from E-file’s team if the IRS should decide to go ahead with an audit.
E-file will correspond with the IRS on your behalf and keep you up to date on the process.
The help sidebar is a useful feature to tax filers that don’t have a lot of experience with using tax software or filing taxes.
The sidebar provides information on the specific tax topic that you are working on, and it directs you to the next step.
File Returns from Prior Years
If you haven’t filed your tax returns for previous years, you can do so now with E-file.
This service is free of charge, and you can claim tax returns for up to three years before.
Customer Support via Email
If you encounter a problem while preparing or filing your taxes, you can contact E-file’s support team by sending an email or filling in a support ticket.
The support team typically respond to queries within one business day.
E-file Plan Types
E-File has three plans that you can choose from, namely:
- Free Basic
- Deluxe, and
Federal and state filing is possible with all versions, and the one you should choose depends on your tax situation and not, as is the case with some other software, the level of support you prefer.
The Free Basic version is suitable for single and joint federal and state tax filers who have no dependents and who are eligible for Form 1040EZ filing.
If you only have to file federal taxes, you will be able to prepare and file your return without having to pay a cent.
If you have to file state taxes, however, you have to pay a basic fee.
The good news is that you can submit multiple state tax returns for the price of one.
The Deluxe plan offers the same benefits as the Basic Free plan for single or joint tax filers who have dependents and who are eligible for filing Form 1040A.
The cost for filing state taxes is the same as for the Basic Free plan, but federal tax filing comes at a nominal fee per return.
If your tax situation is complicated, the Premium plan may be suitable for you. The Premium plan accommodates filing for income from investments, small businesses, and rental properties.
This plan also offers the same features as the Free Basic and Premium plans.
If you opted for one of the other plans and the software detects that your tax situation requires the Premium plan, it will give you the opportunity to upgrade your account.
On the other hand, if you selected the Premium plan but you are eligible for Form 1040A or 1040EZ filing, the software will automatically downgrade your account, and you will not have to pay for the Premium edition.
E-file Prices For This Year
The Free Basic plan is entirely free of charge if you are only filing for federal taxes.
The cost of filing for taxes is the same for all three programs, regardless of how many state returns you are submitting.
The cost per federal return filing is $24.95 with the Deluxe plan and $34.95 with the Premium plan.
State return filing with the Free Basic, Deluxe, and Premium plans cost $19.95.
If you have a simple tax situation but have to file in more than one state, the E-file’s Free Basic plan may easily be the most affordable option on the market.
Keep in mind that these fees are subject to change.
To take a look at the current fee structure, visit E-file’s website.
Advantages & Disadvantages of Using E-file
- Usability: E-file’s interface is straightforward and relatively user-friendly. If you have experience with using tax software, you will be able to prepare and file your taxes without wasting a lot of time.
- Affordability: E-file’s state return and paid federal return filing are affordable in comparison with similar products available.
- Accuracy: When you use E-file’s platform, you can be sure that your information and privacy is completely protected.
- Flexible payments: With E-file, you get the option to pay with your refund.
- State fees: You will not be able to file your state returns for free – not even with the Free Basic plan.
- Customer support: Customer support is limited, and you can only contact E-file’s support team via email or the support ticket.
- Limited imports: You will not be able to import W-2 forms or prior year tax returns from competitor platforms.
E-file offers competitively-priced tax software for basic filers and those with more complex scenarios.
While E-file works with tricky tax situations, the platform strips complication from its software, making filing a quick and easy task.
You also get the assurance that your taxes are being filed properly and securely.
If you’d like a service that helps you file your state taxes free, you may want to look elsewhere.
You can also find platforms which allow you to import your prior W-2s from other software.
If those limits don’t bother you and you want a simplified software you can afford, E-file may be right up your alley.