Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re largely on precisely the exact 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 as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. In return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually provide you access to all the forms you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if 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 affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment 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 are going to get your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage 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. You also have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, 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 means there’s a digital backup of your tax records. 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 advantages — and the process of doing this is simple.
You have four choices for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The forms do the math for you and offer basic guidance. You can only do your federal return with these kinds.
- Use an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some applications 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 free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free help is normally restricted based on earnings, and a few providers appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but 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. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — especially with all these data breaches. But experts agree 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 information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It is important to employ a trusted service to assist you file your taxes. Chow advises to not e-file on a computer or use an online connection which is not confidential.
For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax preparation software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS will be kept secure.