Is e-filing a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are 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. E-filing is popular as it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing actually give you access to all the forms you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.
If you’re thinking about e-filing, a Few 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 does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s 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.
Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by 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 choice to pay your balance by using the IRS Direct 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. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is simple.
You have four options 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 forms do the math for you and provide basic guidance. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your own forms. Some software suppliers charge for their programs, Some are liberated. The software 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 will find volunteers to help prepare and e-file returns. But eligibility for free help is typically limited based on earnings, and a few services cater to particular demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized IRS e-file providers. 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. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — especially with all these data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“E-filing a tax return has turned out 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 as you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is very important to use a trusted service that will help you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which isn’t private.
For many taxpayers, it is sensible to e-file a yield 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 that you use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept secure.