Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
But what about security? And can electronic filing actually give you access to all of the forms that you may need if you’ve got a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 can 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 not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s around 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 problems discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. You can 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, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing 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) can result in interest and penalties.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
The forms do the math for you and provide standard advice. You can simply do your federal return with these forms.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t an issue that should dissuade you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a computer or use an online connection which is not private.
For most taxpayers, it is sensible 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 sure that you use tax planning software from a dependable source, so that you can make certain the information you provide to transmit to the IRS is going to be kept protected.