Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely 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 a favorite as it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing really provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day 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 weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate 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% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment process: 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 later if needed, as long as you pay from the April 15 filing deadline. And you’re able to 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. You also have the choice to pay your balance by using the IRS Direct pay service from the checking or savings account, filing 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 lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax documents. 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 get those benefits — and the process of doing this is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice. You can only do your federal return with all these kinds.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on earnings, and some providers cater to particular demographic groups. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about safety — especially with so many data breaches. But experts agree this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is very important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or use an internet connection which is not confidential.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS is going to be kept protected.