Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
In return, you can find any refund you’re 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 that you might need if you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.
If you’re thinking about 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 that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience when 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. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, 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) can result in interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is simple.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could worry about safety — particularly with all these data breaches. But experts agree this is not an issue which should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal 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 that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to use a trusted service to help you record your taxes. Chow advises not to e-file on a computer or use an online connection which isn’t private.
For many taxpayers, it makes sense to e-file a yield 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 be sure to use tax preparation software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS will be kept protected.