Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly 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.
If you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.
However, what about security? And can electronic filing really provide you access to all of the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: 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 your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if 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 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 option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, submitting 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) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents. If something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is easy.
How to e-file a tax return?
- Use 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 Types — If your income is more than $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some software providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free aid is normally restricted based on income, and a few providers cater to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Employing 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 tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with so many data breaches. But experts agree that this isn’t an issue that should deter you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s very important to use a trusted service that will help you file your taxes. Chow advises not to e-file on a computer or use an internet connection that is not confidential.
For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.