Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. And in return, you can get any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.
But what about safety? And can digital filing really give you access to all of the forms you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The forms do the math for you and provide basic guidance. You can simply do your federal return with these forms.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These options are an easy way to complete and e-file your forms. Some applications providers charge for their apps, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on earnings, and a few services cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree this is not an issue which should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to employ a trusted service that will help you record your taxes. Chow advises to not e-file on a computer or use an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax preparation software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS will be kept protected.