Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank account.
However, what about safety? And can digital filing actually provide you access to all of the forms that you might need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues 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 convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, 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 a digital backup of your tax documents. 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 benefits — and the process of doing this is easy.
- Use 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’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some software providers charge for their apps, Some are liberated. The software asks you simple questions about your life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a record of authorized providers, but you should be aware this option is 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 more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about safety — particularly with so many data breaches. But experts agree that this isn’t an issue that should dissuade you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which is not private.
For many taxpayers, it is sensible to e-file a return since 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 to use tax preparation software from a dependable source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.