Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
The majority of 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.
And in return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really provide you access to all of the forms that you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing has been 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 may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, 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 Immediate pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax documents. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice. You can only do your federal return with all these kinds.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are an easy way to finish and e-file your forms. Some software suppliers charge for their programs, Some are free. The software asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on earnings, and a few providers appeal to particular demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized 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 favored approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about safety — especially with so many data breaches. But experts agree this is not a problem which should dissuade 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, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s very important to employ a trusted service that will 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 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 be sure that you use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.