Is e-filing really a better way to record your taxes?
Americans and the IRS might 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 employees don’t need to spend time manually processing your return. In return, you could get any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.
However, what about safety? And can digital filing really give you access to all the forms that you might need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.
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 one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, provided that 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 the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is easy.
How to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide basic advice. You can only do your federal return with these kinds.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about security — particularly with all these data breaches. But experts agree that this isn’t an issue that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It is important to use a trusted service to assist you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not confidential.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning software from a trusted source, so you may make certain the information which you provide to transmit to the IRS will be kept protected.