Is e-filing really a much 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.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could find any refund you are owed quicker, especially if you have it directly deposited to your bank account.
But what about security? And can digital filing really provide you access to all the forms you might need in case you have a complex tax situation? Are there 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 thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
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 are going to receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund process.
Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from your 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 data: Submitting returns electronically implies there is an electronic backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.
The way to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The types do the math for you and provide standard advice. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some applications providers charge for their programs, Some are free. 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 aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and a few providers cater to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this alternative 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 more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue that 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, marketing and sales at LegalShield. “In actuality, it may 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, explains that the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t confidential.
For many taxpayers, it is sensible to e-file a yield 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 you can make certain the information which you provide to transmit to the IRS will be kept protected.