Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. And in return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank account.
However, what about safety? And can digital filing really provide you access to all the forms you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s 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 opt to e-file and find those advantages — and the process of doing this is easy.
How to e-file a tax return?
- Utilize 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 earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some software suppliers charge for their programs, Some are free. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- 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 specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — especially with all these data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s very important to employ a trustworthy service to assist you record your taxes. Chow advises not to e-file on a computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax preparation software from a trusted source, so you may make certain the information you supply to transmit to the IRS will be kept protected.