Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
In return, you could get 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 electronic filing really provide you access to all the forms that you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your requirements.
If you are 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 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’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, 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 tax data: Submitting returns electronically implies there is a digital copy of your tax records. 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 benefits — and the process of doing so is easy.
The way 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 could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are 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 provide standard guidance. You can only do your federal return with all these kinds.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and finances to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on income, and a few services appeal to particular demographic groups. The IRS maintains a database of licensed providers, but be aware this option is 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 expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree this isn’t a problem that should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s very important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection which isn’t private.
For many taxpayers, it makes sense to e-file a yield 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 be certain that you use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.