Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely 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 need to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing really give you access to all of the forms you may need if you have a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the choice 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 fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents. So 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 advantages — and the process of doing so is simple.
The way 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 have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on earnings, and some services appeal to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated more than 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 security — particularly with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to employ a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or utilize an online connection which is not confidential.
For many taxpayers, it makes sense 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 easy payment options. Just make sure that you use tax preparation software from a trusted source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.