Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely 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.
If you e-file your federal income tax return, you save the IRS cash because its workers don’t have to spend time manually processing your return. In return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually provide you access to all the forms you may need in case you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the choice 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. Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is simple.
The way 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 less you could be able to use the IRS Free File program. The forms do the math for you and provide basic guidance. You can simply do your federal return with these kinds.
- Use an online tax preparation tax or service applications: Tax prep software and online filing services are options. These choices are a simple way to finish and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and financing to steer 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 yields. However, eligibility for free aid is normally restricted based on income, and some services appeal to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — especially with so many data breaches. But experts agree that this is not a problem that should dissuade you from 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 sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to use a trusted service that will assist you record 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 makes sense to e-file a yield since 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 certain that you use tax preparation software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept secure.