Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on 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.
In return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.
But what about safety? And can electronic filing actually give you access to all the forms you may need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.
If you’re 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 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 receive 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% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your 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 tax data: Submitting returns electronically implies there’s a digital copy of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
How to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide standard advice. You can only do your federal return with all these kinds.
Using online tax preparation software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree that this isn’t an issue which should deter you by e-filing.
“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to employ a trusted service that will help you record your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return because 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 dependable source, so you can make certain the information which you supply to transmit to the IRS is going to be kept protected.