Is e-filing a 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 filed to the IRS are e-filed.
And in return, you can get any refund you are owed faster, particularly if you have it directly deposited to your bank account.
But what about safety? And can digital filing actually provide you access to all the forms that you may need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
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 speed up 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% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation 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 a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is simple.
- Utilize 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 over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice. You can simply do your federal return with these forms.
- Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives. These options are an easy way to finish and e-file your own forms. Some applications providers charge for their apps, Some are liberated. The program asks you simple questions about your own life and financing to guide you through the completion of your forms.
- Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns. But eligibility for free aid is normally restricted based on income, and a few providers appeal to specific demographic groups. For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one.
Employing online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — especially with so many data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain to use tax planning software from a trusted source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.