Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the exact 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. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. And in return, you could find any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing actually provide you access to all of the forms you may 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 benefits of e-filing, and if it might be the best filing option for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that 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 get your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: 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 issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay from 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 commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax records. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The forms do the math for you and offer basic advice. You can only do your federal return with all these kinds.
- Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your forms. Some applications suppliers charge for their apps, Some are liberated. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on earnings, and a few providers cater to specific demographic groups. The IRS maintains a record 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 preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“In fact, it can 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 mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an online connection that is not private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept secure.