Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually give you access to all of the forms that you might need in case you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
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 get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there is 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 information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing 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) can result in penalties and interest.
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 fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is simple.
The way to e-file a tax return?
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 have the ability to use the IRS Free File program. The forms do the math for you and provide standard guidance. You can only do your federal return with these kinds.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some applications suppliers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is normally restricted based on income, and some services cater to specific demographic groups. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax preparation 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 program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — especially with so many data breaches. But experts agree that this isn’t an issue that should dissuade you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s important to employ a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not confidential.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain that you use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS will be kept secure.