Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely the exact same page in regards 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’s a win-win for taxpayers and the IRS.
And in return, you can find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing actually give you access to all the forms that you may need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been 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 receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is easy.
- 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 forms do the math for you and provide basic advice. You can simply do your federal return with all these forms.
- Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some software providers charge for their apps, Some are free. The software asks you simple questions about your own 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 returns. But eligibility for free help is typically limited based on income, and a few providers appeal to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. The IRS maintains a record of authorized providers, but be aware this alternative is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be filed 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 that this isn’t an issue that should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a computer or use an online connection that isn’t confidential.
For most taxpayers, it is sensible to e-file a return 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 be sure to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.