Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
And in return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really give you access to all 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’s look at the advantages of e-filing, and if it may be the very best filing choice for your requirements.
If you’re Considering e-filing, some 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 doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, 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 yields.
Simple payment process: If you owe the IRS money, it is 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 from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax documents. So 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 advantages — and the process of doing so is simple.
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The types do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
- Use an online tax preparation service or tax applications: Tax prep software and online filing services are options. These options are an easy way to complete and e-file your forms. Some software suppliers charge for their apps, Some are liberated. The software asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on earnings, and some providers appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one.
Using 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 suitable, you could be worried about safety — particularly with so many data breaches. But experts agree that this is not a problem that should dissuade you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “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 data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s important to employ a trusted service to assist you record your taxes. Chow advises to not e-file on a computer or utilize an online connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a yield 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 sure that you use tax preparation software from a trusted source, so you may make certain the information you supply to transmit to the IRS is going to be kept secure.