Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly on precisely the exact 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.
If you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. In return, you can find any refund you’re owed faster, particularly if you have it directly deposited into your bank account.
But 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 situations when you can not 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, some of the advantages include:
- Quick confirmation your forms are obtained: 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 .
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 receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
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 later if necessary, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Immediate 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. Just be aware delaying payment following the filing due date (typically April 15) can result in interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is an electronic backup of your tax records. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The types do the math for you and provide standard guidance. You can simply do your federal return with these kinds.
- Use an online tax preparation tax or service applications: Tax prep software and online filing services are options. These options are an easy way to finish and e-file your own forms. Some software suppliers charge for their programs, Some are free. The program asks you simple questions about your own life and finances 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 returns. But eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 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 prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — especially with so many data breaches. But experts agree this isn’t a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a public computer or use an online connection that is not private.
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 effortless payment choices. Just be sure to use tax planning software from a dependable source, so you may make certain the information which you provide to transmit to the IRS is going to be kept protected.