Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.
However, what about security? And can digital filing actually provide you access to all the forms you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the very best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when 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 funds 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. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, filing 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 means there is a digital backup of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is simple.
- 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 types do the math for you and provide basic advice. You can simply do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on income, and some services appeal to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should dissuade you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information 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 need token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s very important to use a trustworthy service to help you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not confidential.
For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning software from a dependable source, so you may make certain the information which you supply to transmit to the IRS is going to be kept secure.