Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely the 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. E-filing is popular because it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers don’t need to spend time manually processing your return. In return, you could get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing actually give you access to all the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards 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, as long as 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 or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic copy of your tax documents. 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 advantages — and the practice of doing so is simple.
How to e-file a tax return?
- 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 forms do the math for you and offer basic advice. You can simply do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on earnings, and some providers cater to specific demographic groups. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of 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 convenient, you may worry about safety — particularly with all these data breaches. But experts agree that this isn’t a problem that 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 system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure to use tax planning software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept secure.