Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on precisely the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. And in return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing actually provide you access to all of the forms that you might need in case you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that 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’ll receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, provided that 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 your checking or savings account, filing 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) will result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic copy of your tax records. So 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 advantages — and the process of doing so is easy.
The way to e-file a tax return?
- 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 types do the math for you and offer standard advice. You can only do your federal return with all these kinds.
- Use an online tax preparation tax or service software: Tax prep software and online filing services are options. These options are an easy way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and finances 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. However, eligibility for free aid is typically limited based on income, and a few providers cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — especially with all these data breaches. But experts agree that this isn’t an issue which should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to use a trusted service to help you record 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 return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS will be kept secure.