Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the 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 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 workers do not need to spend time manually processing your return. And in return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.
But what about security? And can electronic filing actually provide you access to all the forms you may need in case you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish 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 less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is simple.
- 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. The types do the math for you and offer standard advice. You can only do your federal return with all these kinds.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some applications suppliers charge for their programs, Some are free. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on income, and some services cater to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. In fact, 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 suitable, you may worry about security — particularly with so many data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it may 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 data security at SCIS Security, explains that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to employ a trustworthy service that will help you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.
For most taxpayers, it makes sense 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 easy payment choices. Just make sure that you use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.