Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually give you access to all of the forms you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation 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 that 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’ll get your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s 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 information on issues discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to 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 your checking account or savings account, 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) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is easy.
How to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
- 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. The forms do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on earnings, and a few providers appeal to particular demographic groups. The IRS maintains a database of licensed providers, but you should be aware this alternative 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 expected over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — particularly with so many data breaches. But experts agree this is not a problem which should deter 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, clarifies the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to employ a trusted service that will help you record your taxes. Chow advises not to e-file on a computer or utilize an online connection which is not confidential.
For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax preparation software from a trusted source, so you may ensure the information you provide to transmit to the IRS is going to be kept secure.