Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted 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 save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.
However, what about security? And can digital filing really provide you access to all the forms you might need in case you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: 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 problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents. If something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.
The way to e-file a tax return?
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The types do the math for you and provide standard guidance. You can simply do your federal return with these forms.
- Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options. These choices are an easy way to finish and e-file your own 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 complimentary, in-person tax help: 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 services appeal to particular 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, such as CPAs, can e-file yields for you if they’re 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 the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — particularly with so many data breaches. But experts agree that this isn’t a problem that should deter you by 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 information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is very important to use a trusted service that will help you file your taxes. Chow advises not to e-file on a computer or use an online connection which is not confidential.
For many taxpayers, it makes sense to e-file a return because 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 to use tax planning software from a trusted source, so you may make certain the information which you provide to transmit to the IRS will be kept secure.