Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely 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.
If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually give you access to all of the forms you might need in case you’ve got a complex 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 best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance 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 returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that 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, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, 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 information: Submitting returns electronically means there is an electronic copy of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
How to e-file a tax return?
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 may be able to use the IRS Free File program. The forms do the math for you and provide standard guidance. You can simply do your federal return with all these forms.
- Utilize an online tax preparation service or tax software: Tax prep software and online filing services are options. These options are an easy way to complete and e-file your forms. Some applications providers charge for their programs, Some are free. The program asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on income, and a few services cater to specific demographic groups. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — especially with so many data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a return because it’s 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 you can ensure the information which you provide to transmit to the IRS is going to be kept secure.