Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on precisely the 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
And in return, you can find any refund you are owed faster, particularly if you have it directly deposited to your bank account.
But what about safety? And can digital filing actually give you access to all the forms that you may 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 whether it may be the very best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation 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 .
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. And you can schedule electronic funds 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. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, filing 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) can result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. The forms do the math for you and provide basic guidance. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The software asks you simple questions about your own life and finances 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. But eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree that this is not a problem which should dissuade you by e-filing.
“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 information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s very important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection that is not private.
For most taxpayers, it is sensible to e-file a return since it’s 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 may make certain the information which you supply to transmit to the IRS is going to be kept secure.