Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing actually provide you access to all of the forms you may need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation 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 doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically means there is an electronic copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is simple.
You have four choices for filing an electronically filed tax return to the IRS.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may 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 any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice. You can only do your federal return with all these kinds.
- Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives. These options are a simple way to complete and e-file your own forms. Some applications suppliers charge for their programs, Some are liberated. The software asks you simple questions about your life and financing to guide 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 yields. However, eligibility for free aid is normally restricted based on income, and some services cater to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 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 prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t a problem that should dissuade you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It is very important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or use an online connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax preparation software from a trusted source, so you may ensure the information you provide to transmit to the IRS is going to be kept secure.