Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. In return, you can find any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually provide you access to all the forms that you may need in case you have a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within one day 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 may take six to eight months to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of errors: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, 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, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using 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 following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Utilize 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. The types do the math for you and offer basic advice. You can simply do your federal return with all these forms.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your life and financing to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on earnings, and some providers appeal to specific demographic groups. The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — especially with all these data breaches. But experts agree that this is not a problem that should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set security measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which isn’t confidential.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax planning software from a trusted source, so that you can make certain the information you supply to transmit to the IRS will be kept protected.