Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the exact 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.
And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing really provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish 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 three weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1% 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 yields.
Simple 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 necessary, provided that you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Direct pay service from the 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 tax information: Submitting returns electronically implies there is a digital backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is simple.
- Utilize 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 earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can only do your federal return with all these kinds.
- Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are an easy way to complete 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 financing to steer you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on income, and some providers cater to specific demographic groups. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of 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 stable?
While e-filing is suitable, you could be worried about safety — particularly with so many data breaches. But experts agree this isn’t an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a computer or use an internet connection which isn’t private.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax preparation software from a dependable source, so that you may make certain the information you supply to transmit to the IRS will be kept protected.