Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on precisely the 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.
And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really give you access to all of the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months 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 errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, 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 returns.
Easy payment process: If you owe the IRS money, it’s simpler 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. Additionally you have the option 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 fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is simple.
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may 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 help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice. You can simply do your federal return with all these forms.
- Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are options. These options are a simple way to complete and e-file your own forms. Some applications suppliers charge for their apps, Some are free. The software asks you simple questions about your life and finances to steer you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is normally restricted based on earnings, and a few services cater to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is 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 over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s important to employ a trusted service to help you record your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t private.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a trusted source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.