Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually give you access to all the forms you may need in case you have 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 option for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day of digital 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 can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you can schedule electronic funds 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. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is easy.
The way to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability 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 earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some applications providers charge for their apps, Some are liberated. The software asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax help: 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 cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — especially with all these data breaches. But experts agree that this isn’t a problem that should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.
For many taxpayers, it is sensible 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 options. Just make certain to use tax preparation software from a dependable source, so you can make certain the information which you provide to transmit to the IRS is going to be kept protected.