Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. In return, you could get any refund you are owed faster, particularly in the event that you have it directly deposited into your bank account.
But what about security? And can electronic filing really give you access to all the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might 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 are going to get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax documents. 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 advantages — and the process of doing this is easy.
How to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.
- Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance. You can simply do your federal return with these kinds.
- Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your forms. Some applications suppliers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping 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 licensed 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 preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.
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 an issue which should dissuade you by e-filing.
“In fact, it may 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 data security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trustworthy service that will help you record your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t confidential.
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 effortless payment choices. Just be certain to use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept protected.