Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. And in return, you can find any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really provide you access to all of the forms that you might need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it may be the best filing option for your needs.
If you are Considering 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 one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there’s 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 info on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to cover at your convenience if 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’re able to schedule electronic money 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 choice to pay your balance by using the IRS Direct pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is easy.
You have four choices 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.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance. You can only do your federal return with these forms.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options. These choices are an easy way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are free. The program asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on earnings, and some providers cater to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four 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 which should deter 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 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 information security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to use a trusted service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that isn’t private.
For most taxpayers, it is sensible 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 effortless payment options. Just make certain to use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept secure.