Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.
However, what about security? And can electronic filing really provide you access to all the forms you might need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues 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 advantage if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s an electronic copy of your tax documents. So if something happens to your paperwork, you will have an electronic 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?
- Utilize 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 forms do the math for you and offer standard guidance. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and some services appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with all these data breaches. But experts agree that this isn’t a problem that should dissuade you from e-filing.
“In fact, 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 email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to employ a trusted service that will help you file your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For many 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 choices. Just make certain that you use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept secure.