Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are 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 because it is a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank account.
However, what about safety? And can electronic filing really give you access to all of the forms you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and if it might be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation 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 doesn’t 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 get your money in three weeks or not. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your 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 following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax documents. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide 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 could have the ability to use the IRS Free File program. The types do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
- Use an internet tax preparation service or tax software: Tax prep software and online filing services are options. These options are an easy way to finish and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your own life and financing to steer you through the completion of your types.
- Get complimentary, in-person tax aid: 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 a few services appeal to specific demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is 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 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 could worry about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which is not confidential.
For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain to use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept secure.