Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite 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 employees do not have to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.
But what about security? And can electronic filing actually give you access to all of the forms you may 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 if it may be the best filing option for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
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 receive your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Easy 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, as long as you pay from the April 15 filing deadline. You also 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 commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is a digital copy of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide basic guidance. You can simply do your federal return with all these kinds.
Using online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — particularly with so many data breaches. But experts agree this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an online connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit 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 dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept protected.