Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on 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 as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. In return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually provide 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 not e-file? Let us look at the benefits of e-filing, and whether it may be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours 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 may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.
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 provide standard guidance. You can simply do your federal return with all these forms.
- Utilize an online tax preparation service or tax 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 applications providers charge for their apps, Some are free. 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 aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and some services cater to particular demographic groups. For 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 be aware this option is 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 tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with so many data breaches. But experts agree this is not an issue that should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is very important to employ a trusted service to assist you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax preparation software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS will be kept protected.