Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page when it comes 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 because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really give you access to all of the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it may be the very best filing choice for your needs.
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 was received within 24 hours of digital 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 may 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 not. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, 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.
Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience when you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
How to e-file a tax return?
- Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. The types do the math for you and provide basic guidance. You can only do your federal return with all these kinds.
- Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options. These options are a simple way to finish and e-file your own forms. Some applications providers charge for their programs, Some are free. The program asks you simple questions about your life and finances to steer 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 returns. However, eligibility for free aid is normally restricted based on earnings, and some providers cater to specific demographic groups. The IRS maintains a database of authorized providers, but 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 expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could worry about safety — particularly with all these data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is very important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an online connection that isn’t confidential.
For most taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure that you use tax preparation software from a trusted source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.