Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re 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 as it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed faster, particularly if you have it directly deposited to your bank account.
However, what about security? And can digital filing really give you access to all the forms you might need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few 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 receive your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to pay at your convenience when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, filing 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) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. 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.
The way to e-file a tax return?
- 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 basic advice. You can only do your federal return with all these kinds.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some applications suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on earnings, and some providers appeal to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — especially with all these data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a computer or use an online connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a yield since 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 that you use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.