Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can electronic filing actually provide you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm 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 .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to cover 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. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking 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) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
The way to e-file a tax return?
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — particularly with all these data breaches. But experts agree that 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, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data 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 safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s important to employ a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure to use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS will be kept protected.