Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly 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.
When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.
However, what about safety? And can digital filing actually provide you access to all the forms you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience if 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’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you 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 commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
The way to e-file a tax return?
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. The types do the math for you and provide standard guidance. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are an easy way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your life and financing 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 providers appeal to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized 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 most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — particularly with all these data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is very important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a computer or use an online connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a return since it’s 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 to use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept secure.