Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on 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. E-filing is popular as it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really give you access to all of the forms you might need in case you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it may be the best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been 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 can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to easily 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 Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so 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 advice. You can only do your federal return with these forms.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — particularly with all these data breaches. But experts agree this is not a problem which should dissuade you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or use an online connection that is not confidential.
For most taxpayers, it makes sense to e-file a return because 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 make sure that you use tax preparation software from a trusted source, so that you can ensure the information you supply to transmit to the IRS is going to be kept secure.