Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted 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 employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.
However, what about safety? And can digital filing actually give you access to all of the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day 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 be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate 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 data: Submitting returns electronically implies there is a digital copy of your tax records. So if something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
The way to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able 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 assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
- Utilize an online 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 liberated. The program asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on earnings, and a few services cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree this is not a problem that should deter 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 leadership, 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 system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted links “
It’s important to use a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or use an online connection which is not private.
For most taxpayers, it makes sense to e-file a return since 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 be certain that you use tax planning software from a trusted source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.