Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely on precisely the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you are owed faster, especially if you have it directly deposited into your bank account.
But what about security? And can electronic filing really provide you access to all of the forms that you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and if it may be the best filing option for your needs.
If you are thinking about 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 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately 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 issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate 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 following the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and provide standard advice. You can simply do your federal return with these forms.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, 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.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is very important to use a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not confidential.
For many taxpayers, it makes sense 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 easy payment options. Just make sure to use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.