Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on 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 popular because it is a win-win for taxpayers and the IRS.
And in return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really provide 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 not e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
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 receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s approximately 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 returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. You also 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 means there’s a digital backup of your tax documents. If something happens to your paperwork, then you will 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 easy.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. The types do the math for you and offer standard advice. You can only do your federal return with these kinds.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are a simple way to complete and e-file your forms. Some software providers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. But eligibility for free aid is normally restricted based on income, and some providers appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — especially with all these data breaches. But experts agree this is not an issue that should deter you from e-filing.
“In actuality, it can 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 data security at SCIS Security, explains the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s very important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or use an online connection that isn’t confidential.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain that you use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.