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 exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank account.
However, what about safety? And can digital filing really provide you access to all of the forms that you might need in case you have a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and if it may be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months 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 chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes 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 convenience if you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. The forms do the math for you and offer basic advice. You can simply do your federal return with these forms.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are options. These options are a simple way to finish and e-file your own forms. Some software providers charge for their programs, Some are liberated. The software asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and a few providers appeal to particular 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 returns for you if they’re authorized 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. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree this is not a problem that should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to 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 data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is very important to use a trustworthy service that will help you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS will be kept secure.