Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could find any refund you are owed faster, particularly if you have it directly deposited into your bank account.
However, what about security? And can digital filing really give you access to all the forms you may need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours 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 may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns 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 necessary, provided that you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, submitting 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 information: Submitting returns electronically means there’s 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 opt to e-file and find those advantages — and the process of doing so is easy.
The way to e-file a tax return?
You have four choices for submitting 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.
- Free File Fillable Forms — If your income is more than $72,000 and you are 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 standard advice. You can only do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are options. These choices are an easy way to finish and e-file your forms. Some applications providers charge for their apps, Some are liberated. The software asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on income, and some services cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — particularly with all these data breaches. But experts agree this is not a problem that should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to use a trustworthy service to help you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection that is not confidential.
For many taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax preparation software from a trusted source, so that you can make certain the information you supply to transmit to the IRS is going to be kept secure.