Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely 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 because it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank account.
But what about safety? And can digital filing actually give you access to all the forms you might need if you have a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from the checking or savings account, 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 interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
- Utilize 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 types do the math for you and offer basic advice. You can only do your federal return with all these kinds.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple 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 life and financing to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and a few providers appeal to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should 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 filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — especially with so many data breaches. But experts agree that this is not an issue which should dissuade you from e-filing.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to use a trusted service that will assist you file your taxes. Chow advises to not e-file on a computer or use an internet connection which isn’t private.
For many taxpayers, it makes sense 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 make certain to use tax preparation software from a trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept protected.