Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
And in return, you can get any refund you are owed faster, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really provide you access to all the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and if it may be the very best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not 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 be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
How to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could 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 assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options. These choices are a simple way to complete and e-file your own forms. Some software providers charge for their programs, Some are free. The software asks you simple questions about your life and financing 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 returns. However, eligibility for free aid is normally restricted based on earnings, and a few services cater to specific demographic groups. The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four 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 safety — especially with all these data breaches. But experts agree this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to employ a trustworthy 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 most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain that you use tax planning software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS is going to be kept protected.