Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you can find any refund you are owed faster, particularly if you have it directly deposited into your bank account.
But what about safety? And can electronic filing actually give you access to all of the forms you might need if you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the very best filing choice for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there is around 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 issues 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 advantage if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing 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) can lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax records. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.
- 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. The types do the math for you and provide standard advice. You can simply do your federal return with all these forms.
- Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are options. These choices are an easy way to complete and e-file your forms. Some applications providers charge for their apps, Some are liberated. The software asks you simple questions about your own life and financing to steer you through the completion of your forms.
- Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free aid is normally restricted based on income, and a few providers appeal to particular demographic groups.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — especially with so many data breaches. But experts agree this is not an issue that should deter you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It is important to use a trusted service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that isn’t confidential.
For most taxpayers, it is sensible to e-file a return because 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 make sure to use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.