Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
In return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually provide you access to all of the forms that you might need in case you’ve got a intricate tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that 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’ll get your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is 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 returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking 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 following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is simple.
How to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
- 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 forms do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple way to complete and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The program asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is normally restricted based on income, and a few providers appeal to particular 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 record of authorized providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to use a trusted service to help you file your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t private.
For many taxpayers, it makes sense 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 effortless payment choices. Just make sure to use tax preparation software from a dependable source, so you may ensure the information you supply to transmit to the IRS is going to be kept protected.