Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really provide you access to all the forms you might need if you have a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation 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 does not 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 are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as 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 the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax records. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find 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 could be able to use the IRS Free File program. The forms do the math for you and offer basic advice. You can only do your federal return with these kinds.
- Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These options are a simple way to finish and e-file your forms. Some software suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — particularly with so many data breaches. But experts agree that this is not a problem that should deter you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is very important to use a trustworthy service that will assist you file your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t confidential.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a dependable source, so you may make certain the information which you provide to transmit to the IRS will be kept protected.