Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could find any refund you are owed faster, particularly if you have it directly deposited into your bank account.
But what about security? And can electronic filing really provide you access to all the forms that you might need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was 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 can take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice. You can only do your federal return with these forms.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives. These choices are a simple way to complete and e-file your own forms. Some applications providers charge for their apps, Some are free. The software asks you simple questions about your own life and finances to steer 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 help is typically limited based on earnings, and some providers cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative 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 anticipated more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — particularly with so many data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which isn’t confidential.
For most 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 choices. Just make sure to use tax planning software from a trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept secure.