Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
And in return, you can find any refund you are owed faster, especially if you have it directly deposited to your bank account.
However, what about safety? And can electronic filing really give you access to all the forms that you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and if it may be the very best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is simpler 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. And you can 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 choice to pay your balance by using the IRS Immediate pay service from the checking or savings account, 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) will result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is simple.
Employing online tax preparation software is far and away the preferred approach of most 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 suitable, you may be worried about safety — especially with all these data breaches. But experts agree this is not a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or utilize an online connection which isn’t private.
For most taxpayers, it makes sense 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 sure to use tax planning software from a trusted source, so you may ensure the information you supply to transmit to the IRS is going to be kept protected.