Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all 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.
And in return, you could 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 actually give you access to all of the forms that you might need if you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s 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 returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file. You can submit returns early and pay later 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, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of 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 following the filing due date (typically April 15) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
- 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 Forms — If your income is more than $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 provide basic advice. You can only do your federal return with these forms.
- Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options. These options are an easy way to complete 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 steer 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 returns. But eligibility for free aid is normally restricted based on earnings, and some services appeal to specific 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 record of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree this isn’t an issue which should dissuade you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax preparation software from a dependable source, so you may ensure the information which you provide to transmit to the IRS will be kept secure.