Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on the exact 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’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. In return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
However, what about safety? And can digital filing really provide you access to all the forms that you may need if you have a intricate tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the very best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, 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 is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, 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) can result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax records. If something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options. These options are a simple way to finish and e-file your forms. Some applications providers charge for their apps, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers that 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 authorized providers, but you should be aware this option is 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 anticipated 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 safety — particularly with so many data breaches. But experts agree that this is not a problem which should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to use a trustworthy service that will help you file your taxes. Chow advises to not e-file on a public computer or utilize an online connection that is not confidential.
For most taxpayers, it is sensible to e-file a yield because it is 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 preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS is going to be kept secure.