Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
In return, you can get any refund you’re owed faster, particularly if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really provide you access to all the forms that you may need if you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of electronic 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 may take six to eight months to be given 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 procedure.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Easy payment procedure: 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 needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to 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 option to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, 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 is a digital copy of your tax records. So if something happens to your paperwork, then you will 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.
- Utilize 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 are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance. You can simply do your federal return with all these forms.
- Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your own life and finances to guide you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on income, and a few services cater to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns 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 likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, 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 security — particularly with so many data breaches. But experts agree that this isn’t a problem that should dissuade you by 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 direction, advertising and revenue at LegalShield. “In actuality, 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 information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to use a trustworthy service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which isn’t private.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax planning software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept protected.