Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely on the exact 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could get any refund you are owed faster, particularly if you have it directly deposited to your bank account.
But what about security? And can digital filing actually give you access to all the forms that you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it may be the very best filing option for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was 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 publish a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking account 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 means there is an electronic backup of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is simple.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and provide standard advice. You can simply do your federal return with all these forms.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue which should dissuade you from e-filing.
“In fact, it can 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, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to use a trusted service to assist you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection that isn’t confidential.
For many taxpayers, it is sensible 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 effortless payment choices. Just be sure that you use tax planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS is going to be kept secure.