Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS cash because its employees do not need to spend time manually processing your return. In return, you can get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually provide you access to all the forms you may need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t 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 speed up the refund procedure.
Reduced chance of errors: According to the IRS, there is around 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 problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, filing 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 lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s an electronic backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
- Utilize 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. The types do the math for you and offer basic advice. You can only do your federal return with these kinds.
- Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options. These options are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The software asks you simple questions about your own life and finances to steer you through the completion of your types.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and some services cater to specific demographic groups. The IRS maintains a record of licensed providers, but be aware this alternative is 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 in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“In actuality, it may 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 mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a return since 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 preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept secure.