Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on precisely 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 a favorite because 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 workers don’t need to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.
However, what about safety? And can electronic filing actually give you access to all the forms that you might need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm 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 publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, 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 a digital copy of your tax records. If something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.
How to e-file a tax return?
- Use 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 forms do the math for you and offer basic guidance. You can only do your federal return with all these kinds.
- Utilize 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 applications providers charge for their apps, Some are liberated. The software asks you simple questions about your own life and finances to steer you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on income, and a few services cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about safety — particularly with so many data breaches. But experts agree this is not a problem which should deter you from e-filing.
“In actuality, it can 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 data security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is important to use a trusted service that will help you file your taxes. Chow advises to not e-file on a public computer or utilize an online connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a yield because 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 certain that you use tax planning software from a dependable source, so you can ensure the information you supply to transmit to the IRS will be kept secure.