Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the 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.
In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really provide you access to all the forms that you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s 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 option to pay your balance by using the IRS Immediate pay service from your 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) will result in penalties and interest.
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, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.
You have four choices for filing an electronically filed tax return to the IRS.
- Use 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 more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice. You can only do your federal return with all these forms.
- Use an online tax preparation service or tax software: Tax preparation software and online filing services are options. These choices are an easy way to finish and e-file your own forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and some providers appeal to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree 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,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to employ a trustworthy service that will help you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which is not private.
For many taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure that you use tax preparation software from a trusted source, so you may make certain the information which you supply to transmit to the IRS will be kept secure.