Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. In return, you can find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
But what about safety? And can digital filing really give you access to all the forms you may need if 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 if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, 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 procedure: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing 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 means there’s an electronic backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is easy.
You have four options 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 over $72,000 and you are comfortable doing your earnings 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 only do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is normally restricted based on earnings, and a few providers appeal to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of licensed 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 the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — particularly with so many data breaches. But experts agree this is not an issue that should deter you from e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s important to employ a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or utilize an internet connection that isn’t confidential.
For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain that you use tax planning software from a trusted source, so you may ensure the information you supply to transmit to the IRS is going to be kept protected.