Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are 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.
And in return, you could get any refund you’re owed faster, particularly if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing actually 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’t e-file? Let us look at the benefits of e-filing, and whether it may be the very best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within one day of digital 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 may take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Easy 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 needed, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there is a digital backup of your tax records. So 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 so is simple.
How to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The forms do the math for you and provide standard guidance. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on income, and a few services appeal 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, 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 option is likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — particularly with so many data breaches. But experts agree that this is not an issue which should dissuade you from 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 data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trusted service to help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection which is not private.
For most taxpayers, it is sensible 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 easy payment choices. Just make certain to use tax preparation software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS will be kept protected.