Is e-filing really a much 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.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing really give you access to all the forms that you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital copy of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is simple.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice. You can only do your federal return with these forms.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are an easy way to finish and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your life and finances to guide you through the completion of your types.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on earnings, and a few providers cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree this isn’t an issue which should dissuade you by e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s very important to use a trusted service that will assist you file your taxes. Chow advises to not e-file on a computer or utilize an internet connection which is not private.
For many taxpayers, it makes sense to e-file a yield 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 be sure that you use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.