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 when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed faster, particularly if you have it directly deposited into your bank accounts.
However, what about safety? And can digital filing actually provide you access to all of the forms that you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
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 are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic money 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. You also have the choice 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 fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. So if something happens to your paperwork, 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 simple.
- 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 Forms — If your income is over $72,000 and you’re 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 these forms.
- Use an internet tax preparation tax or service software: Tax prep software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The software asks you simple questions about your life and finances to guide 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. But eligibility for free aid is normally restricted based on earnings, and a few services cater to particular demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — especially with so many data breaches. But experts agree that this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to use a trustworthy service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not confidential.
For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain to use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.