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.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
And in return, you could find any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
But what about safety? And can electronic filing actually provide you access to all the forms you might need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours 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’ll receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems 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 afterwards if needed, provided that you pay by 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, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is simple.
The forms do the math for you and offer basic guidance. You can simply do your federal return with these kinds.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — especially with so many data breaches. But experts agree this is not an issue which should dissuade you from e-filing.
“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s important to use a trusted service to help you file your taxes. Chow advises not to e-file on a public computer or use an online connection which is not confidential.
For most taxpayers, it is sensible to e-file a yield 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 planning software from a trusted source, so that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.