Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the exact 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. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its workers do not have to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually provide you access to all the forms that you may need if you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your needs.
If you’re Considering e-filing, some 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 electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. You can submit returns early and pay later if necessary, as long as you pay from 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, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing 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 lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there is an electronic copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
The forms do the math for you and offer basic advice. You can only do your federal return with these kinds.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.
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 this isn’t an issue that should deter you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to use a trustworthy service that will help you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS is going to be kept protected.