Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely on 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.
And in return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually provide you access to all the forms you may need in case you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment 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 receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there’s around a 1 percent 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 returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. You can submit returns early and pay later if needed, as long as you pay by 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 option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, filing 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 information: Submitting returns electronically means there is an electronic copy of your tax records. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice. You can only do your federal return with all these forms.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your forms. Some software providers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing 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 yields. However, eligibility for free aid is typically limited based on earnings, and some providers cater to particular demographic groups. For example, 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 likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with so many data breaches. But experts agree that this isn’t a problem that should deter 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 leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an internet connection that is not confidential.
For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax planning software from a dependable source, so you may make certain the information which you supply to transmit to the IRS will be kept secure.