Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on precisely 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 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 workers don’t need to spend time manually processing your return. In return, you could get any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really give you access to all of the forms that you might need in case you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around 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 yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if 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 option to pay your balance by using the IRS Direct pay service from the checking 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 implies there’s an electronic copy of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The types do the math for you and offer standard advice. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some software suppliers charge for their programs, Some are free. The software asks you simple questions about your own life and finances to steer you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on earnings, and some providers cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of 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 suitable, you may worry about security — particularly with so many data breaches. But experts agree this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is very important to employ a trustworthy service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection that isn’t confidential.
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 effortless payment options. Just be sure to use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.