Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
And in return, you could find any refund you’re owed quicker, particularly if 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 that you may need if you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation 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 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 are going to get your money in three weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically means there is an electronic copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing this is simple.
You have four options for submitting an electronically filed tax return to the IRS.
- Utilize 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 provide basic advice. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some software providers charge for their apps, Some are liberated. The software asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on earnings, and some services appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that 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 authorized providers, but you should be aware this alternative is 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 over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — especially with so many data breaches. But experts agree this is not an issue that should deter you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or use an online connection which is not confidential.
For most taxpayers, it is sensible 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 easy payment choices. Just be sure that you use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept protected.