Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on 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 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 if you have it directly deposited into 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’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 whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been 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 submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards 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 commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is a digital backup of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so 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 less you may be able to use the IRS Free File program. The types do the math for you and offer standard advice. You can simply do your federal return with all these forms.
- Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are free. The software 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 yields. But eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — especially with so many data breaches. But experts agree this is not an issue that should deter you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to 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 data safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that isn’t private.
For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept secure.