Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about 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 filed to the IRS are e-filed.
And in return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually provide you access to all of the forms that you might need if you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately 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.
Simple 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 later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you’ll 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 simple.
You have four choices for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less 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’re 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 standard guidance. You can simply do your federal return with these forms.
- Use an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These options are a simple way to complete and e-file your own forms. Some software providers charge for their programs, Some are free. The software asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax help: 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 providers appeal to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record of licensed providers, but you should be aware this alternative is 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 tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with so many data breaches. But experts agree that this isn’t a problem that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s very important to use a trustworthy service that will assist you record your taxes. Chow advises to not e-file on a computer or use an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax preparation software from a dependable source, so you may make certain the information which you provide to transmit to the IRS is going to be kept protected.