Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely 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 a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you are owed faster, particularly in the event that you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really provide you access to all the forms that you may need in case you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was 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 publish a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay later if needed, provided that 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 the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.
You have four options 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 may be able to use the IRS Free File program. The types do the math for you and offer standard guidance. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are options. These options are a simple way to complete and e-file your 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 forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should 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. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — especially with all these data breaches. But experts agree this is not an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which isn’t private.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure that you use tax planning software from a dependable source, so you can ensure the information you provide to transmit to the IRS will be kept protected.