Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about 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.
If you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. And in return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited into your bank account.
However, what about safety? And can digital filing actually provide you access to all the forms you may need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. Additionally you 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 after the filing due date (typically April 15) will result in interest and penalties.
Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
You have four options for submitting an electronically filed tax return to the IRS.
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 filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree this is not a problem that should deter you by e-filing.
“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to employ a trusted service to help you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection which isn’t confidential.
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 easy payment options. Just be certain that you use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.