Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you conserve the IRS cash because its workers do not have to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about security? And can digital filing really give you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it may be the very best filing option for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, 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 means there is an electronic backup of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is easy.
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 less you could have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance. You can simply do your federal return with all these kinds.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some software suppliers charge for their apps, Some are free. The software asks you simple questions about your life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and a few providers cater to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — particularly with all these data breaches. But experts agree this is not a problem that should dissuade you from e-filing.
“In fact, it may be more secure than paper filing as 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, clarifies that the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to use a trustworthy service to help you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain to use tax preparation software from a trusted source, so that you can make certain the information you supply to transmit to the IRS will be kept secure.