Is e-filing a better way to record your taxes?
Americans and the IRS might 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. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about safety? And can digital filing really give you access to all the forms you may need in case you have a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and if it may be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file. You can submit returns early and pay later if needed, provided that you pay by 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, as long as 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 account or savings accounts, submitting 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 means there’s an electronic copy of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this is easy.
How to e-file a tax return?
You have four options for submitting 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.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance. You can only do your federal return with these forms.
- Use an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some applications providers charge for their programs, Some are liberated. The program asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free aid is normally restricted based on income, and a few providers appeal to particular demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a record of licensed providers, but be aware this option is likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — particularly with all these data breaches. But experts agree this is not a problem which should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s important to use a trusted service to help you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
For many taxpayers, it is sensible to e-file a yield because it is 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 that you use tax planning software from a dependable source, so that you can make certain the information you supply to transmit to the IRS is going to be kept protected.