Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re largely 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.
If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.
But what about security? And can electronic 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’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been 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 publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes 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. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic funds 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 choice to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.
The way to e-file a tax return?
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may be worried about safety — particularly with all these data breaches. But experts agree this isn’t an issue which should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is important to employ a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection that is not confidential.
For many 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 effortless payment options. Just make sure that you use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS is going to be kept protected.