Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on precisely 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 because it’s a win-win for taxpayers and the IRS.
And in return, you could 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’t e-file? Let’s look at the benefits of e-filing, and if it might be the very best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: 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 your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is approximately 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 yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if 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 funds 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 Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is simple.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about safety — especially with so many data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s very important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax preparation software from a trusted source, so that you can make certain the information you supply to transmit to the IRS will be kept secure.