Is e-filing a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly on precisely the same page in regards 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 because it is a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually give you access to all of the forms that you might need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic 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 weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, 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 yields.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage 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 can schedule electronic funds 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. You also have the option to pay your balance by using the IRS Immediate 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 following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically means there is a digital backup of your tax documents. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.
The way to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. The types do the math for you and provide standard advice. You can only do your federal return with all these forms.
- Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your forms. Some applications 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 forms.
- 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 a few providers cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed 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.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with so many data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is very important to use a trustworthy service that will help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection which is not confidential.
For many taxpayers, it makes sense to e-file a yield 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 be sure that you use tax preparation software from a dependable source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept protected.