Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on 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.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing really provide you access to all the forms you may need in case you have a intricate 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 option for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also accelerate 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 errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier 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 from the April 15 filing deadline. And you’re able to 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. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, 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) will lead to interest and penalties.
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, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. The types do the math for you and provide standard advice. You can only do your federal return with all these forms.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some software suppliers charge for their apps, Some are liberated. The program asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and a few 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 licensed providers, but 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 most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is very important to employ 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 is not confidential.
For most 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 be sure that you use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept protected.