Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re largely on 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.
If you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. And in return, you can get any refund you’re owed faster, especially if you have it directly deposited to your bank account.
But what about safety? And can electronic filing actually give you access to all the forms that you may need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether 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 obtained: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
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 not. 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 yields, compared with a 20% rate of errors 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’s simpler to pay at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, 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 means there’s a digital backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is simple.
How to e-file a tax return?
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 could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you are 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 only do your federal return with these forms.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some applications providers 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 types.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on income, and some services appeal to specific 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 licensed providers, but be aware this option is very likely to be the most costly one.
Employing online tax prep 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 filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — especially with all these data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“In fact, 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 mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to use a trusted service to help you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection that is not private.
For most taxpayers, it makes sense 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 easy payment choices. Just make sure that you use tax planning software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS will be kept secure.