Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually provide you access to all the forms you might 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 might be the very best filing option for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit 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 3 weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is easy.
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without 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 all these kinds.
- Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are an easy way to finish and e-file your forms. Some applications providers charge for their apps, Some are free. The software asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on income, and a few providers cater to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about safety — especially with so many data breaches. But experts agree this is not an issue that should deter you from e-filing.
“E-filing a tax return has proven to be a very 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 personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s very important to use a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection which is not private.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS will be kept secure.