Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing really provide you access to all of the forms that you may need in case you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day 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 can take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, 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.
Easy payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of 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 means there is an electronic copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is easy.
- Utilize 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 offer standard advice. You can only do your federal return with all these forms.
- Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options. These choices are a simple way to complete and e-file your own forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and some providers appeal to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with so many data breaches. But experts agree that this isn’t a problem that should deter you from e-filing.
“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 information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s important to employ a trusted service that will help you file your taxes. Chow advises not to e-file on a computer or use an internet connection that isn’t private.
For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax planning software from a trusted source, so you can ensure the information which you provide to transmit to the IRS is going to be kept protected.