Is e-filing really a better way to record your taxes?
Americans and the IRS might 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 filed to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might 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 affirm a tax filing has been received within one day 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 months to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the 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 implies there is a digital backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is simple.
How to e-file a tax return?
- Utilize 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 Types — If your income is over $72,000 and you are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice. You can simply do your federal return with all these kinds.
- Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are a simple way to finish and e-file your forms. Some software providers charge for their apps, Some are liberated. The software asks you simple questions about your life and finances to steer you through the completion of your types.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is typically limited based on earnings, and a few services appeal to particular demographic groups. The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree this isn’t an issue that should deter you from 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, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s important to use a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection which is not private.
For many 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 effortless payment options. Just be certain that you use tax planning software from a trusted source, so that you can make certain the information you provide to transmit to the IRS is going to be kept protected.