Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing really provide you access to all of the forms that you may need if you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not 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 receive your money in 3 weeks or not. Choosing direct deposit may 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% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The forms do the math for you and provide standard advice. You can only do your federal return with all these forms.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to guide 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 some services appeal to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree that this is not an issue which should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information 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 information secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is very important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a computer or use an online connection which isn’t confidential.
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 easy payment options. Just be certain that you use tax planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS is going to be kept protected.