Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
In return, you can get any refund you are owed quicker, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing really give you access to all the forms that you might 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 may be the best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when 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 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 option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, 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) 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, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is easy.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can only do your federal return with these forms.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with all these data breaches. But experts agree this isn’t an issue that should deter you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that isn’t confidential.
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 choices. Just be sure to use tax preparation software from a dependable source, so you can make certain the information you supply to transmit to the IRS will be kept protected.