Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. And in return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing actually provide you access to all of the forms you may need if you’ve got 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 might be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are 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 your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive 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 procedure.
Reduced likelihood of mistakes: 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 information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds 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 option to pay your balance by making use of the IRS Direct pay service from the checking account 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) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax records. If something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.
The way to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. The forms do the math for you and offer standard advice. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your forms. Some software suppliers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on income, and some services 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 record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree this isn’t an issue that should dissuade you from e-filing.
“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is very important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it’s 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 to use tax preparation software from a dependable source, so you may make certain the information which you supply to transmit to the IRS is going to be kept secure.