Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page in regards 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 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 need to spend time manually processing your return. And in return, you can find any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing really give you access to all the forms that you might need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was 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 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 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, 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, provided that 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 the 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 data: Submitting returns electronically means there is a digital backup of your tax documents. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is easy.
How to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program. The types do the math for you and offer basic guidance. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some software 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 types.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups. The IRS maintains a record of licensed providers, but you should be aware this option is very 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 expected more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — especially with so many data breaches. But experts agree this is not an issue which should deter you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to employ a trustworthy service that will help you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure to 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.