Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly 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.
When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you can get any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
However, what about safety? And can electronic filing really provide you access to all of the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
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’ll receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there is approximately a 1% 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 returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from your 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 taxation information: Submitting returns electronically means there’s an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.
How to e-file a tax return?
You have four choices 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 could have the ability to use the IRS Free File program. The types do the math for you and provide basic advice. You can simply do your federal return with these forms.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some software 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 forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on earnings, and a few providers appeal to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — particularly with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to employ a trustworthy service that will assist you file 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 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 choices. Just be sure to use tax planning software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.