Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the exact 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 popular as it’s 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 do not need to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about security? And can digital filing actually give you access to all the forms you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation 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 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’ll receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is around a 1% 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 yields.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay from 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, as long as 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 the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
- Use 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 forms do the math for you and provide standard advice. You can simply do your federal return with all these forms.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are options. These choices are an easy way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on earnings, and some services appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is very 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 submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree this is not an issue which should deter you by e-filing.
“E-filing a tax return has proven 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 can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.
For most 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 make sure that you use tax planning software from a trusted source, so that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.