Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re 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. E-filing is popular as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing actually give you access to all the forms that you might need if you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it may be the best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm 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 receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account 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) will result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.
You have four options for submitting an electronically filed tax return to the IRS.
- Use 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 over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice. You can only do your federal return with all these forms.
- Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are an easy way to complete and e-file your own forms. Some applications providers charge for their programs, Some are liberated. The program asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and some providers appeal to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated over four 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 all these data breaches. But experts agree this is not an issue that should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, 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 mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For most taxpayers, it makes sense 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 choices. Just make certain to use tax planning software from a dependable source, so that you can ensure the information you supply to transmit to the IRS is going to be kept protected.