Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all 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.
And in return, you could get any refund you are owed faster, especially if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really give you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% 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.
Easy payment procedure: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you can 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. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is simple.
The way to e-file a tax return?
- Use 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 types do the math for you and provide basic advice. You can simply do your federal return with these forms.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are an easy way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on earnings, and some providers cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record 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 in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — particularly with so many data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s important to employ a trustworthy service that will assist you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not confidential.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain to use tax planning software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.