Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are 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. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
But what about security? And can electronic filing really give you access to all of the forms that you may need in case you have a complex tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing 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 a digital backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.
How 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 could be able to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice. You can only do your federal return with these kinds.
- Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your forms. Some applications providers charge for their programs, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on earnings, and some services cater to specific demographic groups. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree this isn’t a problem which should dissuade you by e-filing.
“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 information security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is very important to employ a trusted service that will assist you record your taxes. Chow advises not to e-file on a computer or use an online connection that isn’t private.
For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.