Is e-filing really a much better way to file 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.
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 don’t need to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing really provide you access to all the forms you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it may be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. You can submit returns early and pay later if needed, as long as you pay from 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, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is simple.
The way to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The types do the math for you and offer basic guidance. You can only do your federal return with these kinds.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on income, and a few services appeal to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very 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 expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — especially with so many data breaches. But experts agree this is not a problem that should deter you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network 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 token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s very important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure that you use tax preparation software from a trusted source, so you can make certain the information which you provide to transmit to the IRS is going to be kept secure.