Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed faster, especially if you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually provide you access to all of the forms that you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Direct 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. Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is easy.
- Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.
- Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice. You can only do your federal return with these forms.
- Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives. These choices are an easy way to complete and e-file your forms. Some applications providers charge for their programs, Some are liberated. 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 aid: In most states, you will find volunteers to help prepare and e-file yields. But eligibility for free help is typically limited based on earnings, and a few providers appeal to particular demographic groups. By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. The IRS maintains a record of authorized providers, but you should be aware this option is very likely to be the most costly one.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with so many data breaches. But experts agree this is not a problem which should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is very important to use a trustworthy service that will help you file your taxes. Chow advises to not e-file on a public computer or utilize an online connection which is not confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain that you use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept protected.