Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually provide you access to all of the forms you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive 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 mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. It’s possible to submit returns early and pay later if necessary, as long as 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 choice 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 commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The fantastic 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?
The forms do the math for you and provide basic advice. You can only do your federal return with these kinds.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — especially with all these data breaches. But experts agree that this isn’t an issue that should dissuade you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be sure that you use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS will be kept secure.