Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. And in return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing actually give you access to all the forms that you might need if you have a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment 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’ll receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can simply do your federal return with these kinds.
- Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These choices are an easy way to finish 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 finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and some providers appeal to particular demographic groups. The IRS maintains a database of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — particularly with so many data breaches. But experts agree this isn’t an issue that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s very important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain that you use tax preparation software from a trusted source, so you can ensure the information you supply to transmit to the IRS is going to be kept protected.