Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the same page when it comes 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 as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about safety? And can digital filing really give you access to all of the forms that you may need in case you have a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm 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 safely.
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’ll receive your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is approximately 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.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience if 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 option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, submitting 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 lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is simple.
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 offer basic guidance. You can only do your federal return with all these kinds.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on earnings, and some services appeal to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trusted service to help 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 return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure to use tax preparation software from a trusted source, so you may make certain the information which you supply to transmit to the IRS will be kept secure.