Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually give you access to all the forms you might need in case you have a complex tax situation? Are there ever 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 option for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within one day 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 may take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as 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 option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.
The way to e-file a tax return?
Using 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 suitable, you may worry about safety — particularly with all these data breaches. But experts agree that this is not a problem that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s very important to use a trusted service that will help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax planning software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept secure.