Is e-filing a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly on 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. E-filing is popular because it is a win-win for taxpayers and the IRS.
In return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.
But what about security? And can digital filing actually provide you access to all of the forms that you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic 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 weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct 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. Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.
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 opt to e-file and find those benefits — and the practice of doing this is easy.
How to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance. You can simply do your federal return with these kinds.
- Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some applications providers charge for their programs, Some are free. The software asks you simple questions about your life and finances 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 returns. But eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is 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 filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — especially with all these data breaches. But experts agree that this isn’t a problem which should deter you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection which is not confidential.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure that you use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.