Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page when it comes 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 because it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its workers 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 to your bank accounts.
However, what about security? And can electronic filing actually give you access to all the forms you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not 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 receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic money 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 making use of the IRS Direct pay service from the checking 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 after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The forms do the math for you and provide standard guidance. You can only do your federal return with all these forms.
- Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some applications providers charge for their apps, Some are liberated. The program 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 aid is normally restricted based on income, and some providers appeal to specific demographic groups. The IRS maintains a database of licensed providers, but you should 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 the majority of taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — especially with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is very important to employ a trusted service to help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection that is not confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure to use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS is going to be kept secure.