Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on precisely the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.
However, what about security? And can electronic filing really provide you access to all of the forms you might need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment 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 are going to get your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. It’s possible to 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 Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax documents. If something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide basic guidance. 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 over four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree that this isn’t an issue that should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing 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 email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to use a trusted service to help you record your taxes. Chow advises not to e-file on a computer or use an online connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain that you use tax planning software from a dependable source, so that you can make certain the information you supply to transmit to the IRS will be kept protected.