Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on 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.
When you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing actually give you access to all of the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and if it may be the very best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day 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 can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is 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. You also have the choice 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.
Digital storage of tax information: Submitting returns electronically implies there is an electronic backup of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide standard guidance. You can simply do your federal return with all these kinds.
Employing online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over 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 — particularly with all these data breaches. But experts agree that this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s important to use a trustworthy service that will assist you record your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t private.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS is going to be kept protected.