Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
The majority of 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.
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. And in return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually provide you access to all of the forms you may need in case you have a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been 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 submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s approximately a 1% 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 returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. And you can schedule electronic money transfers to easily 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 choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, filing 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 an electronic copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so 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 be able to use the IRS Free File program. The forms do the math for you and offer standard advice. You can only do your federal return with these kinds.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some software providers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to guide 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 returns. But eligibility for free aid is typically limited based on earnings, and a few providers appeal to specific demographic groups. By way of 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 option is 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 filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree that this is not 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 leadership, advertising and revenue at LegalShield. “In fact, 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 email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which is not confidential.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain that you use tax planning software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS is going to be kept protected.