Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
And in return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
However, what about security? And can digital filing actually provide you access to all the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day 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 be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s around 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 returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. You also 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. Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the process of doing this is simple.
How to e-file a tax return?
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.
- Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice. 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 choices are a simple way to finish and e-file your forms. Some applications suppliers 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 free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is normally restricted based on income, and a few services appeal to particular demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — especially with all these data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a return 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 be certain to use tax preparation software from a dependable source, so that you can make certain the information which you supply to transmit to the IRS will be kept protected.