Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re largely on the exact same page in regards 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 is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually provide you access to all the forms you might need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the very best filing option for your requirements.
If you’re thinking about e-filing, a Few 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 does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there’s approximately a 1% 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 yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, filing 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 is a digital copy of your tax documents. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get free, in-person tax help: 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 providers cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree this isn’t an issue that should deter you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection which isn’t confidential.
For many taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax preparation software from a trusted source, so you may make certain the information which you provide to transmit to the IRS will be kept secure.