Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing actually provide you access to all the forms that you may 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 might be the very best filing choice for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation 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 does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. And you’re able to 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 making use of the IRS Immediate pay service from your checking 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) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic copy of your tax records. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.
The way 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 less you may have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is over $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 all these kinds.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These options are a simple way to finish and e-file your forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on income, 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 record of licensed providers, but 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. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could worry about safety — especially with all these data breaches. But experts agree that this isn’t an issue that should dissuade you by e-filing.
“In fact, it may be more secure than paper filing as 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, explains the IRS has put safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is very important to use a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection which isn’t private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain that you use tax preparation software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.