Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are 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. E-filing is popular as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. In return, you could get any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing actually give you access to all the forms you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it might be the very best filing choice for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s approximately 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 yields.
Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds 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. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital copy of your tax records. 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 process of doing so is easy.
You have four choices for filing an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with so many data breaches. But experts agree that this isn’t a problem which should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trusted service to assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that is not confidential.
For most taxpayers, it is sensible to e-file a return since it’s 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 to use tax preparation software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.