Is e-filing a much better way to record your taxes?
Americans and the IRS might 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 submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. In return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank accounts.
However, what about safety? And can electronic filing actually give you access to all 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 may be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
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 process.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic money 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 option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there is a digital backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is easy.
The way to e-file a tax return?
- Use 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 offer basic advice. You can only do your federal return with all these forms.
- Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options. These choices are a simple way to finish and e-file your forms. Some software providers charge for their apps, Some are free. The software asks you simple questions about your life and finances 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 yields. However, eligibility for free help is normally restricted based on income, and some providers appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should 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 the majority of taxpayers. In fact, 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 all these data breaches. But experts agree this is not an issue which should deter you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trustworthy service to help you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be sure to use tax preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS is going to be kept protected.