Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually give you access to all of the forms you may need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you can 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 option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting 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) can result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is simple.
You have four options for filing an electronically filed tax return to the IRS.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — particularly with so many data breaches. But experts agree that this is not a problem that should dissuade you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set security measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a computer or utilize an online connection which is not private.
For most taxpayers, it makes sense 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 effortless payment options. Just make certain to use tax planning software from a dependable source, so you can make certain the information you supply to transmit to the IRS will be kept secure.