Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely 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.
When you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually give you access to all the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may be the very best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of electronic 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 weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s around 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 problems discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by 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, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.
How to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide standard guidance. You can simply do your federal return with all these kinds.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about security — particularly with so many data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s very important to use a trusted service to help you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that is not confidential.
For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure that you use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.