Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the 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. E-filing is a favorite as it is 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 do not have to spend time manually processing your return. And in return, you could get any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing really give you access to all the forms you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: According to 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 returns compared with paper returns.
Easy payment procedure: 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 later if necessary, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds 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 the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
The way to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice. You can simply do your federal return with these forms.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These choices are an easy way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on income, and some services cater to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but 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. In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — especially with so many data breaches. But experts agree this is not a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s very important to employ a trusted service to help you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which is not confidential.
For most taxpayers, it is sensible 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 easy payment choices. Just make sure to use tax preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.