Is e-filing a better way to file your taxes?
Americans and the IRS may 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.
In return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing really give you access to all the forms that you may need if you have 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 best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent 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 yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your advantage if you e-file. You can submit returns early and pay later if necessary, as long as you pay from 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 making use of the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.
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 not as you could be able to use the IRS Free File program.
- Free File Fillable Types — 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 types do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These choices are a simple way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you can 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. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. 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. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may be worried about security — particularly with all these data breaches. But experts agree that this is not a problem 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 system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s very important to use a trustworthy service to help you file your taxes. Chow advises not to e-file on a computer or utilize an online connection that isn’t confidential.
For most taxpayers, it is sensible 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 options. Just make certain to use tax preparation software from a dependable source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.