Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
In return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.
But what about safety? And can electronic filing really provide you access to all the forms that you might need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: 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 necessary, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by using 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 lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy 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 process of doing so is easy.
The way to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without assistance, 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 forms.
- Utilize an online tax preparation service or tax 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 programs, Some are free. The program asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and a few providers cater to specific demographic groups. The IRS maintains a database of authorized providers, but be aware this option 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 over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — especially with all these data breaches. But experts agree this is not an issue which should dissuade you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to use a trusted service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which isn’t confidential.
For many 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 options. Just make sure to use tax planning software from a trusted source, so you can make certain the information you supply to transmit to the IRS is going to be kept secure.