Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re largely on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
In return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really give you access to all the forms you might need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or not. 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 errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice 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.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice. You can simply do your federal return with all these kinds.
- Use an internet tax preparation tax or service 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 software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated over four 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 isn’t a problem which should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a dependable source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.