Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the same page when it comes 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 because it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. In return, you can find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing really give you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s 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, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax records. So if something happens to your paperwork, you’ll 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.
- 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. The types do the math for you and provide basic advice. You can simply do your federal return with all these kinds.
- Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options. These choices are an easy way to finish and e-file your own forms. Some applications providers 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 aid: In most states, you can find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and a few services cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax preparation software is far and away the favored 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 stable?
While e-filing is suitable, you may be worried about security — particularly with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links “
It is very important to use a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.
For many 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 options. Just be sure to use tax preparation software from a dependable source, so you can make certain the information you supply to transmit to the IRS is going to be kept secure.