Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
In return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really give you access to all of the forms you might need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is simple.
Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It is important to use a trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not private.
For most taxpayers, it is sensible 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 easy payment choices. Just be certain that you use tax preparation software from a dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept secure.