Is e-filing a better way to record your taxes?
Americans and the IRS may 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. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
However, what about security? And can digital filing really provide you access to all of the forms that you might need if you have a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether 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 has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
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 get your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed returns, 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 returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. It’s possible to 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 easily send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, 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 implies there’s an electronic copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is easy.
How to e-file a tax return?
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 basic advice. You can only do your federal return with all these forms.
- 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 forms. Some applications providers charge for their programs, Some are liberated. The program asks you simple questions about your life and financing to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is typically limited based on income, and a few services appeal to specific demographic groups. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with so many data breaches. But experts agree this is not a problem which should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It’s very important to use a trustworthy service that will 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 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 choices. Just be certain that you use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.