Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted 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 money because its employees do not have to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing really provide you access to all of the forms that you might need in case you’ve got a complex 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 option for your requirements.
If you’re thinking about 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 electronic 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 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 can also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, as long as 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. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, filing 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 taxation information: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
The forms do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — particularly 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 an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be sure to use tax planning software from a dependable source, so that you can make certain the information you supply to transmit to the IRS is going to be kept secure.