Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re largely on precisely the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
But what about security? And can electronic filing really provide you access to all of the forms you might need in case you have a intricate tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and whether it may be the best filing choice for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, 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, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is easy.
The way to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “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, clarifies the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to use a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an online connection which is not confidential.
For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be sure that you use tax preparation software from a dependable source, so you may make certain the information which you supply to transmit to the IRS will be kept protected.