Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS money because its workers do not have to spend time manually processing your return. In return, you could find any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually give you access to all of the forms 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 benefits of e-filing, and if it might be the best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: 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 may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: 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 afterwards 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, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is an electronic copy of your tax records. So if something happens to your paperwork, 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.
You have four options for submitting an electronically filed tax return to the IRS.
- 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.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- 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 earnings, and a few providers appeal to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected more than four in five 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 security — especially with all these data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to use a trustworthy service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not private.
For many taxpayers, it is sensible 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 effortless payment options. Just be sure that you use tax preparation software from a dependable source, so that you can make certain the information you provide to transmit to the IRS will be kept secure.