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 precisely 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. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
When 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. In return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually give you access to all the forms that you might need if 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 are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
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 less. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file. You can submit returns early and pay afterwards if needed, provided that 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, as long as 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, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance. You can only do your federal return with these kinds.
- Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are a simple way to complete and e-file your forms. Some software suppliers charge for their apps, Some are free. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on earnings, and some services appeal to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree this isn’t an issue that should dissuade you from e-filing.
“In actuality, it may 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 data security at SCIS Security, explains the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to employ a trusted service to assist you file your taxes. Chow advises to not e-file on a computer or utilize an internet connection that isn’t private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept secure.