Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely 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 popular because it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.
However, 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’s look at the benefits of e-filing, and if it might be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood 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 information on problems discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
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 may be able to use the IRS Free File program. The types do the math for you and provide basic advice. You can simply do your federal return with these forms.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your forms. Some software suppliers charge for their apps, Some are free. The software 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 yields. However, eligibility for free aid is normally restricted based on income, and a few services appeal to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record 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 preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about safety — especially with all these data breaches. But experts agree this isn’t an issue which should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to employ a trustworthy service that will help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not confidential.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure to use tax preparation software from a dependable source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.