Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing actually give you access to all the forms you might 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 whether it might be the best filing option for your needs.
If you’re 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 electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
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 receive your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1% 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 yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you can 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. Additionally you have the choice to pay your balance by using the IRS Direct 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. Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.
How to e-file a tax return?
- Use 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 offer standard guidance. You can only do your federal return with all these kinds.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are liberated. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on earnings, and a few services cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could worry about safety — especially with all these data breaches. But experts agree that this is not a problem which should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All 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 which is not confidential.
For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax preparation software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept secure.