Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the exact same page when it comes to e-filing individual income tax returns.
Nearly all 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.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? 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 situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours 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 may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues 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 advantage when you e-file. You can submit returns early and pay later if needed, as long as 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. You also have the option 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 commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is simple.
- 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 offer basic advice. You can simply do your federal return with these forms.
- Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some applications providers charge for their programs, Some are liberated. The program asks you simple questions about your own 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. But eligibility for free aid is typically limited based on earnings, and a few providers appeal to particular demographic groups. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four 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 safety — particularly with all these data breaches. But experts agree this is not an issue which should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal 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 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 employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or use an online connection that is not private.
For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS is going to be kept secure.