Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are 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. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all of the forms that you might need if you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you’re Considering e-filing, a Few 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 publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate 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 following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there is a digital copy of your tax documents. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
You have four options 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. The types do the math for you and provide basic guidance. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are a simple way to complete and e-file your own forms. Some software providers charge for their apps, Some are liberated. The software asks you simple questions about your life and finances to steer you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on income, and a few providers cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with so many data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data secure. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection which isn’t private.
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 to use tax planning software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS will be kept secure.