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.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. In return, you could get any refund you are owed faster, especially if you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing really give you access to all the forms that you might need if you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected 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 may worry about security — especially with all these data breaches. But experts agree this is not a problem which should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may 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, explains the IRS has set security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that isn’t private.
For most taxpayers, it makes sense 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 effortless payment options. Just make certain to use tax planning software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept secure.