Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it is a win-win for taxpayers and the IRS.
And in return, you can find any refund you’re owed faster, particularly if you have it directly deposited to your bank account.
But what about security? And can digital filing really give you access to all the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: 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 weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: 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 returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you’re able to 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. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, 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 lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is an electronic 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 decide to e-file and get those benefits — and the practice of doing so is simple.
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. The forms do the math for you and offer standard guidance. You can only do your federal return with all these forms.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited 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.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal 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 that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s very important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not confidential.
For many taxpayers, it is sensible to e-file a return because it’s 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 planning software from a dependable source, so you can ensure the information which you supply to transmit to the IRS will be kept secure.