Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you are owed quicker, especially if you have it directly deposited to your bank account.
But what about security? And can electronic filing really provide you access to all of the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation 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 can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, 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 yields.
Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is easy.
How to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance. You can simply do your federal return with all these forms.
- Use an internet tax preparation tax or service applications: Tax preparation 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 programs, Some are liberated. The program asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and some services appeal to particular demographic groups. The IRS maintains a record of authorized providers, but be aware this option is very likely to be the most costly one.
Employing online tax prep software is far and away the favored approach of most 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 convenient, you may worry about security — especially with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to employ a trusted service that will assist you file your taxes. Chow advises not to e-file on a public computer or use an internet connection that isn’t private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain to use tax preparation software from a trusted source, so you may ensure the information which you provide to transmit to the IRS will be kept protected.