Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
If you e-file your federal income tax return, you conserve the IRS money because its workers don’t need to spend time manually processing your return. And in return, you can get any refund you’re owed faster, particularly if you have it directly deposited into your bank account.
But what about security? And can electronic filing actually provide you access to all of the forms you might need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours 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 be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, submitting 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) can result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is simple.
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 may have the ability to use the IRS Free File program. The types do the math for you and offer standard guidance. You can simply do your federal return with these forms.
- Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and some services appeal to specific demographic groups. The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree this is not an issue which should dissuade you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It is important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection which isn’t confidential.
For most 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 effortless payment choices. Just make sure to use tax planning software from a trusted source, so that you may make certain the information you supply to transmit to the IRS will be kept protected.