Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely the exact 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. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually give you access to all of the forms you may need in case you’ve got a intricate tax situation? Are there ever situations when you can not 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 are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing was 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 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 may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process 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 could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance. You can only do your federal return with all these forms.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These options are a simple way to complete and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on income, and a few services cater to specific demographic groups. 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 prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — especially with all these data breaches. But experts agree that this is not a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states 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 as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is very important to use a trustworthy service that will help you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not confidential.
For many 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 which you supply to transmit to the IRS will be kept secure.