Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank account.
However, what about safety? And can electronic filing actually give you access to all the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm 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 submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately 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 yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from 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. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there’s an electronic backup of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.
- 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.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance. You can only do your federal return with these forms.
- Use 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 own forms. Some software suppliers charge for their apps, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and a few providers appeal to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. The IRS maintains a database of authorized providers, but 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 expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about safety — especially with so many data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“In fact, it may 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, clarifies the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s 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 online connection which is not confidential.
For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure that you use tax planning software from a dependable source, so you can make certain the information you supply to transmit to the IRS is going to be kept protected.