Is e-filing a better way to file your taxes?
Americans and the IRS may 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 filed to the IRS are e-filed.
And in return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really provide you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the best filing choice for your needs.
If you are Considering e-filing, a Few 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 submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account 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) can result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.
How to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The types do the math for you and offer standard guidance. You can simply do your federal return with all these forms.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some software suppliers charge for their programs, Some are free. The software asks you simple questions about your own life and finances to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and a few services appeal to particular demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s very important to employ a trusted service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it makes sense 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 make certain to use tax preparation software from a trusted source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.