Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the exact 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.
In return, you could get any refund you are owed faster, especially if you have it directly deposited to your bank account.
But what about safety? And can digital filing actually give you access to all the forms you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: 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 .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. And you can schedule electronic money transfers to 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 option to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting 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 interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.
The way 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 may be able to use the IRS Free File program. The types do the math for you and provide standard guidance. You can simply do your federal return with all these kinds.
- Use an online tax preparation tax or service software: Tax prep software and online filing services are options. These choices are a simple way to complete and e-file your forms. Some software suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and finances to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — particularly with so many data breaches. But experts agree that this is not an issue which should deter you from e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s important to employ a trusted service that will help you file your taxes. Chow advises to not e-file on a public computer or use an online connection that is not private.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax planning software from a dependable source, so you may make certain the information you supply to transmit to the IRS will be kept protected.