Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re largely on precisely 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.
And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
But what about safety? And can digital filing actually provide you access to all of the forms you might need in case you have a complex tax situation? Are there 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 choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your advantage when 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 Direct pay service from the 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 means there is a digital copy of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is simple.
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 have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, 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 forms.
- Utilize 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 forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and some services cater to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized 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 the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — particularly with so many data breaches. But experts agree this isn’t a problem that 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 system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is very important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that isn’t private.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax planning software from a dependable source, so that you can make certain the information you provide to transmit to the IRS is going to be kept protected.