Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. In return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about security? And can electronic filing really provide you access to all of the forms that you may need in case you have a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you’re thinking about 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 electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: 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 issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money 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 using the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is simple.
How to e-file a tax return?
You have four options for filing 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 advice. You can simply do your federal return with these kinds.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These options are a simple way to finish and e-file your own forms. Some applications suppliers charge for their programs, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your types.
- 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 normally restricted based on earnings, and a few services cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping 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.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s very important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that is not confidential.
For most taxpayers, it makes sense to e-file a yield since it’s 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 planning software from a dependable source, so you may make certain the information you supply to transmit to the IRS is going to be kept protected.