Is e-filing a much better way to file your taxes?
Americans and the IRS may 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.
When you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. In return, you could get any refund you are owed faster, especially if you have it directly deposited to your bank account.
But what about safety? And can electronic filing actually provide you access to all of the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm 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 months to receive a tax refund. With e-filing, you’ll get your money in three 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% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from 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 option to pay your balance by making use of the IRS Direct pay service from your checking 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 a digital copy of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this 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. The types do the math for you and provide standard advice. You can simply do your federal return with all these forms.
- Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are a simple way to finish and e-file your forms. Some software 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 types.
- Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and some providers cater to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting 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 licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most 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 be worried about safety — especially with all these data breaches. But experts agree this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is very important to use a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not private.
For many taxpayers, it is sensible to e-file a return 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 sure to use tax preparation software from a dependable source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept secure.