Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually give you access to all of the forms that you may need if you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation 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 are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards 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. Additionally you have the option to pay your balance by making use of 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.
Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — especially with so many data breaches. But experts agree that this isn’t a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is very important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a public computer or use an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return because 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 make sure that you use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept secure.