Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely 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. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank accounts.
But what about security? And can digital filing really give you access to all the forms you might need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt 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 less you may be able to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice. You can simply do your federal return with these kinds.
- Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on income, and a few services cater to specific demographic groups. The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t an issue which 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 sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to use a trustworthy service that will help you record your taxes. Chow advises to not e-file on a public computer or use an internet connection that is not private.
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 easy payment options. Just make sure to use tax preparation software from a trusted source, so you may ensure the information which you provide to transmit to the IRS will be kept secure.