Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
In return, you could find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually provide you access to all of the forms you might need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing was 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 be given 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 procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience 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, provided that the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
The way to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. The types do the math for you and offer standard advice. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some software suppliers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and a few services appeal to particular 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 authorized providers, but be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the favored 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 software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — especially with all these data breaches. But experts agree this isn’t an issue that should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that 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 this is routed over TLS encrypted connections”
It’s important to employ a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or use an online connection that is not confidential.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax preparation software from a trusted source, so that you can ensure the information you supply to transmit to the IRS will be kept secure.