Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted 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 are owed quicker, particularly in the event that you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually give you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the very best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation 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 does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes 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 simpler to cover at your advantage 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. Additionally you have the choice to pay your balance by using the IRS Direct 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 means there is a digital copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.
- 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 provide standard guidance. You can simply do your federal return with these forms.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some software suppliers charge for their apps, Some are free. The program asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on income, and a few providers cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re 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 preparation software is far and away the favored 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 stable?
While e-filing is convenient, you may be worried about safety — particularly with all these data breaches. But experts agree that this is not an issue which should deter you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a computer or utilize an online connection that is not private.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain that you use tax preparation software from a trusted source, so you may ensure the information which you provide to transmit to the IRS is going to be kept secure.