Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the 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 because it’s a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really provide you access to all the forms that you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are 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 safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money 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. Additionally you have the option to pay your balance by making use of 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.
Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records. If something happens to your paperwork, you will 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 options 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 may be able to use the IRS Free File program. The forms do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are options. These choices are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and a few services appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree that this isn’t an issue which should deter you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising 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 information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s very important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection that is not private.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit 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 may ensure the information which you provide to transmit to the IRS will be kept secure.