Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about safety? And can digital filing actually give you access to all 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 best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day 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 be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience when you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to 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 option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is a digital copy 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 practice of doing so is simple.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The types do the math for you and offer standard guidance. You can only do your federal return with these kinds.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some software providers charge for their programs, Some are free. 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 help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on earnings, and a few providers cater to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue which should dissuade you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection which is not private.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax preparation software from a dependable source, so you can ensure the information you supply to transmit to the IRS is going to be kept secure.