Is e-filing a better way to record 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.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed quicker, especially if you have it directly deposited into your bank account.
But what about safety? And can digital filing really give you access to all the forms that you may need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there’s approximately a 1% error rate on e-filed yields, 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 yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money 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. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing 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 means there is a digital copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is easy.
You have four options 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 types do the math for you and offer standard advice. You can only do your federal return with all these kinds.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are options. These choices are a simple way to finish and e-file your forms. Some applications providers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on earnings, and a few providers cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may be worried about security — particularly with so many data breaches. But experts agree this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data 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 data safe. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to employ a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which isn’t private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain that you use tax preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept secure.