Is e-filing really a better way to file 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 submitted to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually provide you access to all of the forms you might need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, 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.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. You can submit returns early and pay later if needed, as long as 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, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting 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 result in penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. The forms do the math for you and offer standard guidance. 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 options are an easy way to complete and e-file your own forms. Some applications providers charge for their apps, Some are free. The program asks you simple questions about your own life and finances to guide 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 returns. But eligibility for free help is typically limited based on income, and a few services cater to specific demographic groups. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — particularly with all these data breaches. But experts agree this is not a problem which should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s 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 internet connection that isn’t 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 effortless payment options. Just be sure that you use tax preparation software from a trusted source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.