Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular because it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
But what about security? And can electronic filing really give you access to all of the forms you might need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the very best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing was 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 publish a paper filing, it may take six to eight months 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 procedure.
Reduced chance of mistakes: 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 info on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting 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 implies there is an electronic backup of your tax documents. So if something happens to your paperwork, 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 this is easy.
How to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
- Use 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.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice. You can simply do your federal return with these kinds.
- Use an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are liberated. The software asks you simple questions about your life and finances to steer 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 help is typically limited based on earnings, and some providers cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but 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 the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — particularly with so many data breaches. But experts agree that this is not a problem that should deter you from e-filing.
“In fact, 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, explains that the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to employ a trustworthy service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t confidential.
For most taxpayers, it is sensible 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 effortless payment options. Just be certain to use tax planning software from a trusted source, so that you can make certain the information you supply to transmit to the IRS will be kept protected.