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Is e-filing really a much better way to record 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.

Nearly all individual income tax returns filed to the IRS are e-filed. 

In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.

But what about safety?  And can digital filing really give you access to all of the forms that you may need if you have a complex tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing option for your needs.

If you’re Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  And you can 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. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax records.  So if something happens to your paperwork, you will have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is simple.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program.  The types do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    2. Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and a few services cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    4. 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 record of authorized 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 most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you could worry about security — especially with all these data breaches.  But experts agree this is not an issue that should deter you from 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 personal information through an encrypted network rather than exposing your information in the email.”

Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

It’s very important to employ a trustworthy 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.

Bottom line

For many taxpayers, it is sensible to e-file a return 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 make certain to use tax planning software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS will be kept protected.