Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re 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 popular because 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 get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank account.
But what about safety? And can digital filing actually provide you access to all of the forms you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and if it might be the best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. The forms do the math for you and offer basic guidance. You can only do your federal return with all these forms.
- Use an online tax preparation service or tax applications: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your forms. Some software providers charge for their programs, Some are liberated. 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 returns. But eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized 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 preferred approach of the majority of taxpayers. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — particularly with so many data breaches. But experts agree that this isn’t an issue which should dissuade you by 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, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing since 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 safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s very important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For many taxpayers, it makes sense 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 easy payment choices. Just make certain that you use tax preparation 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.