Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re largely on 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.
In return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
But what about security? And can electronic filing actually provide you access to all of the forms you might need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: 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 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’ll receive your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around a 1% 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.
Simple payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay later 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 your checking or savings account, 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 lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there is an electronic copy of your tax documents. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.
The way to e-file a tax return?
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 less you may have the ability to use the IRS Free File program. The types do the math for you and offer standard guidance. You can only do your federal return with all these kinds.
- Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are an easy way to finish and e-file your forms. Some software providers charge for their programs, Some are liberated. 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 aid is typically limited based on income, and some services appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized 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 prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted links “
It’s important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t private.
For many taxpayers, it is sensible to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax planning software from a dependable source, so you can make certain the information you supply to transmit to the IRS will be kept secure.