Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
The majority of 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.
If you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about security? And can digital filing actually provide you access to all of the forms that you might need in case you have a complex tax situation? Are there ever 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 needs.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage when 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. You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is simple.
The way to e-file a tax return?
- 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.
- Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. 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 tax or service software: Tax preparation software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some software providers charge for their apps, Some are liberated. The program asks you simple questions about your life and financing to steer you through the completion of your forms.
- Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on income, and a few providers cater to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed 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.
Employing 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 submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree this isn’t an issue which should dissuade you from e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is important to employ a trusted service to assist you file your taxes. Chow advises to not e-file on a public computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a yield 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 certain to use tax preparation software from a dependable source, so you may make certain the information which you supply to transmit to the IRS is going to be kept protected.