Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular as 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 workers don’t have to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can electronic filing actually give you access to all the forms that you may need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was 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 may take six to eight weeks 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 mistakes: According to the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account 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 after the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there’s a digital copy of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Utilize 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 guidance. You can only do your federal return with these kinds.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some software suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups. For instance, 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 yields for you if they are licensed 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.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — especially with so many data breaches. But experts agree that this isn’t an issue which should deter you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It is very important to use a trustworthy service that will assist you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that is not confidential.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning software from a trusted source, so that you can make certain the information you supply to transmit to the IRS is going to be kept protected.