Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on precisely 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.
In return, you could find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing really provide you access to all the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing has been received within one day of digital 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. You can submit returns early and pay later if needed, 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, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings account, 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 means there’s an electronic copy of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and get those advantages — 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 not as you could have the ability to use the IRS Free File program. The forms do the math for you and provide standard advice. You can only do your federal return with these forms.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are options. These options are an easy way to complete and e-file your own forms. Some software suppliers charge for their apps, Some are free. The program asks you simple questions about your life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is typically limited based on earnings, and a few providers cater to specific demographic groups. The IRS maintains a record of authorized providers, but be aware this alternative 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 expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — especially with so many data breaches. But experts agree this is not a problem that should deter you by e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is important to employ a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that isn’t private.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain to use tax planning software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept protected.