Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
In return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing really give you access to all of the forms you might need in case you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you are Considering 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 doesn’t send any acknowledgment that 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 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from 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, as long as 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 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 following the filing due date (typically April 15) will result in penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents. If something happens to your paperwork, then you will 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.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — particularly with so many data breaches. But experts agree this isn’t an issue which should deter you from e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.
For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning 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 protected.