Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about 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 filed to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its workers do not have to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t 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 receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues 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 convenience if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay by 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 choice to pay your balance by using the IRS Immediate pay service from the checking 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 data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
How 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 not as you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. 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 service or tax applications: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your forms. Some applications providers charge for their programs, Some are liberated. The software asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is normally restricted based on earnings, and a few providers appeal to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax prep 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 program.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree this is not a problem which should dissuade you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is very important to use a trusted service that will help you record your taxes. Chow advises to not e-file on a public computer or use an internet connection which is not confidential.
For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.