Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If 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 could find any refund you are owed faster, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing actually provide you access to all of the forms that you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t 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 be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance 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 mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the option 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 commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there is an electronic copy of your tax records. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.
The way to e-file a tax return?
- 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 Types — If your income is more than $72,000 and you are comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some applications providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on income, and some services appeal to particular demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a database of authorized providers, but you should be aware this option 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 more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — especially with all these data breaches. But experts agree this isn’t an issue that should deter you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or use an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain that you use tax planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept secure.