Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the exact 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. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees don’t need 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 into your bank account.
However, what about safety? And can digital filing really provide you access to all of the forms that you may need if you have 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 might be the best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Direct pay service from the 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) will result in interest and penalties.
Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is simple.
You have four options for filing 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 be able to use the IRS Free File program. The forms do the math for you and offer basic guidance. You can simply do your federal return with these forms.
- Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These options are an easy way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The program asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on earnings, and a few providers cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of the majority of 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 worry about safety — especially with so many data breaches. But experts agree that this is not a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain that you use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS will be kept protected.