Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
And in return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually give you access to all the forms you might 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 confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s 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 problems discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by 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. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, submitting 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) can lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
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 anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a computer or utilize an online connection which isn’t private.
For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain that you use tax preparation software from a dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept secure.