Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re largely on precisely the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. In return, you can get any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can digital 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’s look at the advantages of e-filing, and if it may be the best filing choice for your requirements.
If you are 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 one day of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: According to the IRS, there’s approximately a 1% error rate on e-filed yields, 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 process: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from 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, provided that 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 the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is easy.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide basic advice. You can simply do your federal return with all these forms.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not confidential.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax preparation software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept protected.