Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly 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. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
But what about security? And can electronic filing actually provide you access to all of the forms that you might need in case you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not 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 three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, submitting 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 implies there is an electronic backup of your tax records. If something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is simple.
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 could 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 taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic 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 options. These choices are a simple way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are liberated. The software asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and some providers cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized 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 preferred approach of most taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree that this isn’t a problem which should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal 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 the IRS has put safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to use a trusted service that will help you file your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a yield because 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 be sure that you use tax planning software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS will be kept protected.