Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree about 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 submitted to the IRS are e-filed.
In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really provide you access to all of the forms that you might 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 if it may be the best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital 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 months to be given 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: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there is a digital backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on earnings, and some providers cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — particularly with all these data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s very important to use a trustworthy service to help you file your taxes. Chow advises not to e-file on a computer or utilize an online connection that is not private.
For many taxpayers, it is sensible to e-file a yield since 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 to use tax planning software from a trusted source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.