Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re 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 a favorite as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. In return, you can find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.
However, what about safety? And can digital filing actually provide you access to all of the forms you might need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the very best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment 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’ll get your money in three weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money 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 option to pay your balance by using the IRS Direct pay service from the checking account or savings account, submitting 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 is an electronic copy of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The forms do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These choices are a simple way to complete and e-file your forms. Some applications providers charge for their apps, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free help is normally restricted based on earnings, and some providers cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem which should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that is not confidential.
For many taxpayers, it is sensible to e-file a yield because 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 be certain that you use tax planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept protected.