Even confident first-time tax filers will likely ask themselves: What is the best way to file online taxes? The simple answer is that what works best for filing taxes online looks different for each individual and small business. Getting tax software that accommodates any taxpayer’s needs is essential for complete compliance and efficiency. Whether it is your first time needing to file any taxes or you have not filed them before because a tax professional did it, there are a number of things to consider and ways to prepare yourself for the process.
The error rate for paper tax returns is 21% versus less than 1% among e-filed returns.
One practical way to prepare yourself is by investing in do-it-yourself tax software with intuitive software like our 1099-etc E-Filer. Our program will help eliminate the irritating cost of ordering too many forms or the inconvenience of running out of forms.
Is the Best Way to File Online Taxes with DIY Software?
There are always benefits and drawbacks to handling online tax filing by yourself. Relying on tax software is something that many individuals and small businesses opt to do as a trusted solution that may not cost them as much as hiring a tax professional. Tax software is worthwhile if:
- You have limited income sources (W-2s, bank accounts, 1099s, etc.)
- You intend on taking the standard deduction
- You have used a tax professional and want more control
Weighing any advantages and disadvantages is important. Knowing what you can expect will often help to save you money and avoid any unnecessary, or unpleasant, audits.
When is a Tax Professional Useful for Tax Filing?
The best way to file online taxes for some filers is by using a tax professional. Hiring a tax pro to streamline the reporting and submission process makes sense when you have:
- Complicated taxes
- Experienced a major life change (new business, marriage/divorce, had a child)
- Received income from multiple sources
- Investment losses that you need support with handling
- Received an inheritance
- Recently settled or plan to settle an estate
Taking care of the deductions or credits that come from these scenarios can be difficult enough. Consider the constantly changing tax laws and regulations. Tax professionals are typically more privy when it comes to staying compliant and having access to thorough software.
It is still worth noting that the best way to file online taxes may change over time. An intuitive program may be exactly what you need if you possess some level of expertise and found a system with a minor learning curve.
Best Ways to Choose E-Filing Services
Assessing your tax situation to decide if downloading e-filing services is the best choice for you may take as much time as it does to hire a tax professional. It is important not to just get caught up in everything that tax filing software can offer you.
- Step 1: Consider the features that you need (basic tools vs. complex calculation tools)
- Step 2: Review any budgetary restrictions or cost limitations
- Step 3: Ask a provider about the tax forms and locations that they support
- Step 4: Try a demo or trial to determine a software’s usability and compatibility as the best way to file online taxes
- Step 5: Review customer experience features (customer support, backup and security)
Testing the interface before you commit to your tax filing software is ultimately the best way of knowing what you are getting and that it will work for you. Whether you are looking to start the process of individually filing your taxes or need to report them for a small business, you need software that is designed to meet your unique requirements.
Best Ways to Choose a Tax Professional
Trusting who you hire to take care of your most sensitive financial details is no small task. You need to feel confident that they will accurately file your income tax return. The best way to file online taxes is ruling out ghost preparers who are big concerns when it comes to anyone filing inaccurate or fraudulent returns. Then, you should take the following steps:
- Step 1: Check a tax professional’s qualifications
- Step 2: Review a tax expert’s history
- Step 3: Discuss any service fees
- Step 4: Confirm an expert’s accessibility to you before and after any deadline
- Step 5: Make sure that a tax preparer signs your return and includes their Preparer Tax Identification Number
Transparency is crucial when you choose any tax expert, but it is not always guaranteed. Using a software provider may give you a greater sense of control and provide a clearer picture about what you can expect from the best way to file online taxes.
Popular Options for Online Tax Filing
Streamlining accuracy, convenience, and security are all beneficial when it comes time to file your taxes while using online software. Expediting how promptly you receive refunds from the Internal Revenue Service is an added benefit for e-file software users.
The IRS issues most refunds within 21 days for taxpayers who file electronically and select the direct deposit option.
Those who are still unsure about the best e-filing option can consider three possible solutions aside from tax software programs.
- IRS Fillable Forms
- IRS Free File
- IRS Direct File
IRS Fillable Forms
Using Fillable Forms offers total control but does not support automatic transfer of information when it comes to handling your state tax returns. It might be the best way to file online taxes if you do not want your data to pass through a third-party service. One major disadvantage is it requires more manual data entries, which can leave you susceptible to a higher error rate.
IRS Free File
Taxpayers who meet the tax year’s adjusted gross income (AGI) threshold may select the filing service. The IRS partners up with online tax preparation companies and offers guided tax filing.
IRS Direct File
Using the Direct File option will depend on your location and how many deductions and credits need to be handled. Those who can use it receive free filing and live support via chat or phone.
Steps to File Your Own Taxes
Determining the best way to file online taxes will only get you so far. Make sure that you have all of the necessary materials and documentation, plus you know how to organize them. Collect all:
- Income Tax Forms
- Deductions and Credits
The next steps after collecting what you need for filing certain taxes include:
Step 1: Identifying Tax Deadlines and Dates
Mid-April is the deadline that everyone is familiar with when it comes to turning in your federal income tax return. Although filing during the 2025 tax season is meant to focus on filing taxes for the 2024 tax year, future dates to mark down include:
- Oct. 15, 2025: The new due date if you requested an extension by Tax Day
- April 2026: The deadline for filing 2025 taxes
Step 2: Understanding How Taxes are Determined
Fully optimizing the best way to file online taxes means knowing your tax bracket and whether you work or reside in a state with income taxes. Getting tax software that is scalable and offers its users broad geo-location support simplifies how you can handle taxes now and in the future.
Step 3: Deciding How to File Your Taxes
Although we outlined above the different options for filing your taxes, it is worth mentioning an outdated method that individuals and businesses should avoid using.
Filling out IRS Form 1040 by hand and mailing it is not recommended.
The “U.S. Individual Income Tax Return” allows its users to report income, claim tax deductions and credits, and calculate their tax refund or bill for a specific year. The IRS revises the form on an annual basis. Finding the best way to file online taxes may not seem necessary to tax filers with simple situations that only require Form 1040. Yet completing any form manually is a risk for users and can leave them open to fines or penalties for avoidable errors.
What are Common Tax Return Filing Mistakes?
Many of the most common tax return errors are simple but easily avoided with electronic forms filing. The best tax software makes the calculations, identifies incomplete areas, and sends the appropriate forms to the relevant recipients. Keep an eye on oversights, including:
- Filing before you receive all of your documentation
- Misspelled (or inaccurate) names that do not match a person’s Social Security card
- Math mistakes (the best way to file online taxes using software is with an automated system that calculates wages, dividends, and other income for accuracy)
- Incorrect filing status
- Mistaken credits or deductions
- Wrong bank account numbers (direct deposit simplifies receiving any tax refunds)
- Unsigned forms
AMS Software Filing Advantage
E-filing is faster, easier, and more accurate than filing a paper return or waiting for a tax expert to complete the submission. Our 1099-etc E-Filer provides users with a do-it-yourself approach or offers an alternative option with additional third-party support.
E-File Direct (add-on)
- Unlimited number of form filings
- Flat fee
- Creates files within the program directory
Some users alternatively decide that the best way to file online taxes using software is with our E-File Services option that:
- Files forms electronically through a third-party vendor
- Charges volume pricing (fee per form)
- Includes customization for different service levels
Download our free 1099-etc Demo software today to discover how our E-Filer operates with the core system and any other optional add-on modules.