Is e-filing a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely the same page when it comes 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 have to spend time manually processing your return. And in return, you could find any refund you are owed quicker, especially if you have it directly deposited into your bank account.
However, what about safety? And can electronic filing really provide you access to all the forms you might need if you have a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of digital 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 can take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience 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. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, 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) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is simple.
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 not as you could have the ability to use the IRS Free File program. The types do the math for you and offer basic advice. You can only do your federal return with all these forms.
- Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These choices are a simple way to complete and e-file your own forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your own life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on earnings, and some providers appeal to particular demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — particularly with so many data breaches. But experts agree this is not a problem that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is very important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t confidential.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax preparation software from a trusted source, so you may ensure the information you supply to transmit to the IRS will be kept secure.