Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely 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. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing really give you access to all of the forms that you might need if you have a complex tax situation? Are there 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 requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit 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 not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. You also have the option 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 following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.
The way to e-file a tax return?
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 have the ability to use the IRS Free File program. The types do the math for you and offer basic advice. 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 alternatives. These options are an easy way to finish and e-file your own forms. Some software providers charge for their programs, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on income, and a few providers appeal to specific demographic groups. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — especially with so many data breaches. But experts agree this isn’t a problem which should deter 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 leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain to use tax planning software from a trusted source, so you may ensure the information you provide to transmit to the IRS will be kept protected.