Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
And in return, you can find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.
But what about security? And can electronic filing really give you access to all the forms you may need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s 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 information on issues discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to 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 the checking 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 information: Submitting returns electronically means there is a digital copy 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 find those advantages — and the practice of doing this is simple.
The way to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
- 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 provide standard advice. You can simply do your federal return with all these kinds.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These options are a simple way to finish and e-file your forms. Some applications providers charge for their programs, Some are free. The program asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on income, and a few services cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — especially with all these data breaches. But experts agree this isn’t a problem that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It’s very important to employ a trusted service that will help you record your taxes. Chow advises to not e-file on a public computer or use an online connection which isn’t confidential.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept secure.