Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely 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.
And in return, you can get any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.
But what about safety? And can digital 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’t e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm 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 weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The types do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing 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. But eligibility for free help is typically limited based on income, and some providers appeal to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record of authorized providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree this isn’t a problem which should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “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 information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not private.
For many taxpayers, it makes sense 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 options. Just be certain to use tax preparation software from a trusted source, so you may make certain the information which you provide to transmit to the IRS will be kept secure.