Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely 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.
And in return, you can find any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really provide you access to all of 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 advantages of e-filing, and if it might be the best filing option for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was 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 receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, 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 data: Submitting returns electronically implies there’s an electronic backup of your tax documents. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
The way 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 not as 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 assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can only do your federal return with all these kinds.
- Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple way to finish and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and some providers cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — especially with so many data breaches. But experts agree this isn’t a problem 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, marketing and revenue at LegalShield. “In fact, it can 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 email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It is 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 internet connection which is not confidential.
For many taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure to use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS will be kept protected.