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 exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. And in return, you could find any refund you are owed quicker, especially if you have it directly deposited to your bank account.
However, what about safety? And can digital filing actually provide you access to all the forms that you might need if you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within one day 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to 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 your checking or savings account, 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 means there’s an electronic copy of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.
You have four options for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able 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 these forms.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on income, and some providers appeal 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 you should 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 the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — particularly with all these data breaches. But experts agree that this is not an issue which should deter you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It is important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or use an online connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure that you use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.