Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely on the 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. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
In return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
But what about security? And can digital filing actually provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital 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 can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from the checking account 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 after the filing due date (typically April 15) will result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is easy.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about safety — especially with so many data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“In actuality, 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 information security at SCIS Security, explains the IRS has set security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It’s important to use a trusted service that will help you file your taxes. Chow advises to not e-file on a public computer or use an online connection which is not private.
For many taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain that you use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS will be kept protected.