Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on 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.
In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually give you access to all the forms that you might need in case 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 best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish 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 less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there is 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 problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there is a digital backup of your tax records. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is simple.
The way to e-file a tax return?
You have four options 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 may have the ability to use the IRS Free File program. The forms do the math for you and offer basic guidance. You can only do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These options are an easy way to complete and e-file your forms. Some software suppliers charge for their programs, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on earnings, and a few services cater to specific demographic groups. For example, 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 returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, 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 data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to employ a trustworthy service to help you file your taxes. Chow advises to not e-file on a public computer or use an internet connection that is not private.
For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure that you use tax planning software from a dependable source, so you can ensure the information you supply to transmit to the IRS will be kept secure.