Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely 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. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers don’t need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about security? And can digital filing really provide you access to all the forms that you may need in case you have a complex tax situation? Are there situations when you can not 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’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is around 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 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 when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there’s an electronic 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 opt 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 choices 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.
- Free File Fillable Forms — If your income is more than $72,000 and you are 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 simply do your federal return with these forms.
- Utilize 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 programs, Some are free. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and some providers appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative 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 expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with so many data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that 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 can be routed over TLS encrypted connections”
It is very important to employ a trusted service that will help you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which is not private.
For most taxpayers, it makes sense 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 easy payment choices. Just be sure that you use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept secure.