Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on the 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 as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing actually provide you access to all of the forms you may need if you have a intricate tax situation? Are there ever situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: 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 your forms have arrived .
Timely refunds: When you publish 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 less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you’re able to 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking or savings account, 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 lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is easy.
How to e-file a tax return?
The types do the math for you and provide basic advice. You can only do your federal return with these forms.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It is very important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a computer or use an internet connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.