Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re largely on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite because 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 do not need to spend time manually processing your return. In return, you can find any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really give 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’s look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes 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’s easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, 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, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is simple.
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 have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can only do your federal return with all these kinds.
- Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These choices are a simple 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 own life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: 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. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is very 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 expected over four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — particularly with so many data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a computer or use an online connection which is not confidential.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain that you use tax planning software from a trusted source, so you may ensure the information you supply to transmit to the IRS will be kept secure.