Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the exact 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.
In return, you can find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing actually provide you access to all the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s around 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 problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax documents. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is easy.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice. You can only do your federal return with these forms.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These choices are an easy way to finish and e-file your forms. Some applications suppliers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing 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 yields. But eligibility for free aid is normally restricted based on earnings, and a few services appeal to particular demographic groups. The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — especially with all these data breaches. But experts agree this is not a problem that should dissuade you from 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, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s very important to use a trustworthy service that will help you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not confidential.
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 easy 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.