Is e-filing really a 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 submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
In return, you can get any refund you’re owed faster, especially if you have it directly deposited to your bank account.
However, what about security? And can digital filing actually give you access to all the forms that you might need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been 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 your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that 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 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 following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is easy.
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 could have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These choices are a simple way to complete and e-file your forms. Some applications suppliers charge for their apps, Some are liberated. The software asks you simple questions about your 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. But eligibility for free help is typically limited based on income, and a few providers cater to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree that this is not a problem that should deter you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to use a trustworthy service to help you file your taxes. Chow advises to not e-file on a public computer or use an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure that you use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept protected.