Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the exact 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.
When you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could find any refund you’re owed faster, particularly if you have it directly deposited to your bank account.
However, what about security? And can electronic filing really give you access to all the forms that you may need in case you’ve got a intricate tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you’re Considering 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 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment 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 three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes 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 cover at your advantage if you e-file. You can submit returns early and pay later if necessary, provided that 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. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account 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’s an electronic backup of your tax documents. So if something happens to your paperwork, you’ll have a digital backup.
The good 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 submitting an electronically filed tax return to the IRS.
- 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.
- Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice. You can simply do your federal return with all these kinds.
- Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These options are a simple way to complete and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your life and financing to guide you through the completion of your types.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields. However, eligibility for free help is typically limited based on income, and a few providers appeal to particular demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t a problem that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It is important to use a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which isn’t confidential.
For many taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS is going to be kept protected.