Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually give you access to all of the forms you may need in case you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: 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 your forms have arrived .
Timely refunds: When you submit a paper filing, it may 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 accelerate the refund process.
Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax records. 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 this is easy.
The way to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. The forms do the math for you and provide standard advice. You can only do your federal return with all these kinds.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some applications suppliers charge for their programs, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on income, and a few services appeal to specific 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 are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree that this isn’t a problem which 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 as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to use a trustworthy service to help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection that is not confidential.
For most taxpayers, it is sensible to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain to use tax preparation software from a trusted source, so that you can make certain the information you supply to transmit to the IRS is going to be kept protected.