Is e-filing a better way to file your taxes?
Americans and the IRS may 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 filed to the IRS are e-filed.
And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually give you access to all of the forms you may need in case you’ve got 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, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there’s 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 yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The forms do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are options. These choices are an easy way to finish and e-file your forms. Some software suppliers charge for their apps, Some are liberated. The software asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is very 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 more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree this is not a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is very important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection that is not private.
For many taxpayers, it makes sense to e-file a yield because 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 to use tax planning software from a dependable source, so you can make certain the information which you provide to transmit to the IRS is going to be kept secure.