Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the 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 popular as it is a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually provide you access to all of the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the very best filing option for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
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 issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you can schedule electronic money 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 choice to pay your balance by making use of the IRS Direct pay service from your 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 result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax records. So 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 process of doing so is easy.
The way to e-file a tax return?
You have four choices for filing 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.
- Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance. You can simply do your federal return with these forms.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some applications providers charge for their programs, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is normally restricted based on income, and a few services cater to specific demographic groups. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about safety — particularly with all these data breaches. But experts agree this is not a problem which should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is very important to use a trustworthy service that will help you record your taxes. Chow advises not to e-file on a computer or use an internet connection that is not confidential.
For most taxpayers, it is sensible to e-file a yield 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 make certain that you use tax planning software from a dependable source, so you can ensure the information which you supply to transmit to the IRS is going to be kept secure.