Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing really provide you access to all of the forms that you may need if you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing was 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 can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards if needed, provided that 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 choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, submitting 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 implies there is an electronic backup of your tax documents. 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 get those advantages — and the process of doing so is easy.
The way to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you’re 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 offer basic advice. You can simply do your federal return with these forms.
- Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your life and financing to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on income, and some services appeal to specific demographic groups. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — especially with all these data breaches. But experts agree this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to use a trustworthy service that will help you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not confidential.
For most taxpayers, it makes sense to e-file a return because 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 certain that you use tax preparation software from a dependable source, so you can ensure the information which you provide to transmit to the IRS will be kept protected.