Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
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 get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually provide you access to all the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day 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 may take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from 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, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of 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 lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is easy.
How to e-file a tax return?
Employing online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with so many data breaches. But experts agree that this is not an issue that should deter you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information 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 secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to employ a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not private.
For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.