Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. And in return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing really provide you access to all the forms that you might need in case you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment process: 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, provided that you pay by the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there is a digital backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
How to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic guidance. You can only do your federal return with all these kinds.
- Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple way to complete and e-file your forms. Some software providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — particularly with all these data breaches. But experts agree that this is not a problem that should deter you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s important to use a trusted service that will help you file your taxes. Chow advises to not e-file on a computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be sure to use tax planning software from a trusted source, so that you can ensure the information you provide to transmit to the IRS will be kept protected.