Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re largely on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing really give you access to all of the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and if it may be the best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: 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 your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to easily 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 making use of the IRS Immediate pay service from the 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) will result in penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax documents. So if something happens to your paperwork, you’ll 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 simple.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.
- Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance. You can only do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax preparation 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 software asks you simple questions about your own life and finances to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one.
Using online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — particularly with so many data breaches. But experts agree this isn’t an issue which should deter you from e-filing.
“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 data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to employ a trustworthy service to help you file your taxes. Chow advises not to e-file on a computer or use an internet connection which is not private.
For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax preparation software from a dependable source, so that you may make certain the information you provide to transmit to the IRS will be kept secure.