Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re 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 as it’s a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
But what about safety? And can electronic filing actually provide you access to all the forms that you might need in case you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been 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 may 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 less. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems 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 convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily 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 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) will result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
You have four choices for filing an electronically filed tax return to the IRS.
The forms do the math for you and offer standard advice. You can simply do your federal return with all these forms.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with all these data breaches. But experts agree this isn’t a problem which 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 sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to employ a trusted service to help you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection which 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 certain to use tax planning software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept secure.