Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely 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. E-filing is popular because it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. In return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank account.
But what about safety? And can digital filing actually give you access to all the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may 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 not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Direct 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 is an electronic copy of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree this is not a problem which should dissuade you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your personal 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 security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which 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 easy payment choices. Just be sure that you use tax preparation software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS is going to be kept protected.