Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the exact same page in regards to e-filing individual income tax returns.
The majority of 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 find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
However, what about security? And can electronic filing really provide you access to all the forms that you might need in case you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing option for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours 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 can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay later if needed, as long as you pay from 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, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.
You have four options 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 be able to use the IRS Free File program. The forms do the math for you and provide standard advice. You can simply do your federal return with these kinds.
- Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives. These choices are a simple way to complete and e-file your forms. Some applications suppliers charge for their programs, Some are free. The program asks you simple questions about your life and finances 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. However, eligibility for free aid is normally restricted based on earnings, and some providers cater to specific demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option 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 over four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree this is not an issue which should dissuade you by 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 leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s very important to use a trustworthy service that will assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.
For many taxpayers, it makes sense 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 easy payment choices. Just be certain to use tax planning software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept secure.