Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on precisely 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 a favorite because it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
But what about safety? And can electronic filing actually provide 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’t e-file? Let us look at the benefits of e-filing, and whether it might be the very best filing option for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can 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 can also speed up the refund process.
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% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting 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) will result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
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 less you could be able 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 offer basic advice. You can only do your federal return with all these forms.
- Use an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These options are a simple way to finish and e-file your own forms. Some software providers 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 aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and some providers cater to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four in five 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 security — particularly with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is very important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or use an internet connection which is not private.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure that you use tax preparation software from a dependable source, so you can ensure the information you provide to transmit to the IRS is going to be kept protected.