Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely 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.
And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing really give you access to all of the forms that you may need if 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 very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: 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 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’ll receive your money in three weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is 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 from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, 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 lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is simple.
The way to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice. You can simply do your federal return with these forms.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some applications providers charge for their programs, Some are free. The program asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on income, and some providers cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
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 that 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, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to employ a trusted service that will assist you file your taxes. Chow advises not to e-file on a computer or use an internet connection which is not confidential.
For many 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 options. Just be sure that you use tax planning software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept protected.