How Does Electronic Filing Work? How Does It Benefit Me?
Electronic filing transmits data electronically, via a modem, versus mailing a paper return. Both federal, and most state tax returns (including New York State), can be electronically filed. Electronic filing has become very beneficial for taxpayers in recent years.

One reason to electronically file a tax return is to decrease the processing time. By submitting your return electronically you can receive your refund in half the time. Your refund can be sent either by mail or directly deposited into your checking or savings account. A refund can be directly deposited into a checking account between 10-14 days, where as a check sent via e-filing will be received in about a month. That is more than twice as fast as sending your return the traditional way.

The second reason to have your tax return sent electronically is because it significantly reduces errors by IRS. These figures, from IRS web site, indicate that the IRS error rate on an e-filed tax return is 0.5% compared to 21% for a traditional paper filed return.

What if I have a balance due on my electronically filed tax return?
When a balance is due to I.R.S. or New York State there are several payment methods that can be selected. The first is to send a check, along with your payment voucher, on or before April 15th. Another method of payment is by direct debit.

When submitting a tax return, you have the option of having a direct withdrawal from your checking or savings account. The payment to IRS/NYS can be made for any amount, and any date on or before April 15th. This allows you to send in your tax return in January and still not pay the balance due until April; however, the full balance owed to IRS must be paid by April 15th. If you cannot pay the full balance by April 15th, an installment agreement can be arranged with the IRS. The direct debit option must be chosen for New York State at the time of your tax appointment; however, with IRS you can set it up at the time or your appointment or by calling 1-888-353-4537. The next payment option is with a credit card.

You can pay the balance on current years tax returns with a Mastercard, American Express, or Discover Card. You can pay the balance due on your tax return by calling Official Payments Corp at 1-(888)-2PAY-TAX or Link to Gov Corp at 1-800-PAY1040. The payment to IRS can be made for any amount and any date, on or before April 15th. This allows you to send in your tax return in January and still not pay the balance due until April; however, the full balance owed to the IRS must be paid by April 15th.

If you cannot pay the full balance by April 15th, another option is available with IRS: An installment agreement. This is available for taxpayers who will not be able to pay their entire tax balance by April 15th. The taxpayer is subject to statutory interest and underpayment penalties and a one-time processing fee to setup the agreement. The Installment Agreement form can be submitted electronically with the return.