Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about 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 submitted to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing actually provide you access to all of the forms 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 advantages of e-filing, and if it might be the very best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file. You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to easily 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 your 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 taxation data: Submitting returns electronically implies there is an electronic copy of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
The way to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice. You can simply do your federal return with all these forms.
- Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives. These choices are an easy way to finish and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your life and financing to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on earnings, and a few providers cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of authorized providers, but you should be aware this option 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. In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — especially with all these data breaches. But experts agree that this isn’t an issue that should dissuade you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to use a trusted service to help you file your taxes. Chow advises not to e-file on a computer or use an internet connection that isn’t private.
For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure that you use tax preparation software from a dependable source, so you can ensure the information you supply to transmit to the IRS will be kept protected.