Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are 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 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 don’t have to spend time manually processing your return. And in return, you can find any refund you’re owed faster, especially if you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually provide you access to all of the forms you may need in case you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was 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 submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of errors: According to the IRS, there is 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 information on problems discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you can 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 option to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is easy.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice. You can simply do your federal return with all these forms.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some applications providers charge for their programs, Some are free. 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 aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on income, and some providers appeal to particular demographic groups. The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about safety — especially with so many data breaches. But experts agree this is not an issue that should dissuade you by e-filing.
“In fact, it can be more secure than paper filing as 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 put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted links “
It is important to use a trustworthy service that will assist you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that is not private.
For many taxpayers, it is sensible to e-file a return since it’s 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 that you use tax preparation software from a trusted source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.