Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.
But what about security? And can digital filing really give you access to all of the forms you might need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there is around 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 problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, filing 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 interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
The way to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. The forms do the math for you and offer basic advice. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are free. The software asks you simple questions about your own life and finances to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to use a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection which is not private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax preparation software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS will be kept protected.