Is e-filing really a 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.
In return, you could get any refund you are owed quicker, particularly 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 that you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by 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. You also have the choice 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 fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is easy.
How to e-file a tax return?
The types do the math for you and offer standard advice. You can only do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t an issue which should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It is important to employ a trustworthy service to help you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that isn’t private.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax preparation software from a dependable source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.