Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really provide you access to all of the forms you may need in case you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there is an electronic copy of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is easy.
How to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These choices are an easy way to complete and e-file your forms. Some software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to guide you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on earnings, and some services cater to particular demographic groups. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — especially with all these data breaches. But experts agree that this isn’t a problem which should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s 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 which is not private.
For most taxpayers, it is sensible to e-file a yield since 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 be sure to use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS is going to be kept secure.