Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the exact same page when it comes 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 as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. And in return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually give you access to all the forms you might need if you’ve got a intricate 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 choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was 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 submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s 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 info on problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily 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 making use of the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s an electronic backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is easy.
The way to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information 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 safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s very important to use a trusted service that will help you file your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t private.
For many 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 choices. Just be sure that you use tax preparation software from a trusted source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.