Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could get any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually provide you access to all the forms you might need in case 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 if it may be the best filing choice for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you’re able to 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 choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies 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 get those benefits — and the practice of doing this is easy.
The forms do the math for you and provide basic guidance. You can only do your federal return with all these forms.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — especially with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It is very important to employ a trusted service to assist 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 makes sense 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 planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.