Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.
But 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 us look at the benefits of e-filing, and if it might be the very best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. The types do the math for you and provide standard advice. You can only do your federal return with all these forms.
- Use an online tax preparation service or tax software: Tax prep software and online filing services are alternatives. These choices are a simple way to finish and e-file your own forms. Some software providers charge for their apps, Some are free. The program asks you simple questions about your life and finances to guide you through the completion of your types.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields. However, eligibility for free aid is typically limited based on income, and a few providers appeal to specific demographic groups. By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree this isn’t a problem which should deter you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains 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 of this can be routed over TLS encrypted links “
It is important to employ a trustworthy service that will help you record 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 return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure to use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.