Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the exact 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 is a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing really give you access to all the forms you might need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it may be the best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital 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 can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed yields, 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.
Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax records. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
How 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 have the ability to use the IRS Free File program. The types do the math for you and provide basic guidance. You can only do your federal return with these forms.
- Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options. These choices are a simple way to complete 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 finances to guide you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is normally restricted based on income, and a few services appeal to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — especially with all these data breaches. But experts agree this isn’t a problem that should dissuade you by e-filing.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s important to employ a trusted service to assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection that is not private.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain that you use tax preparation software from a dependable source, so you may ensure the information you supply to transmit to the IRS will be kept protected.