Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about 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 submitted to the IRS are e-filed. E-filing is a favorite because 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. And in return, you can get any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.
However, what about safety? And can electronic filing actually provide you access to all the forms that you may need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the 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 affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to get your money in three weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax documents. So 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 benefits — and the practice of doing so is easy.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — especially with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is very important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not private.
For most taxpayers, it makes sense 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 easy payment choices. Just be sure that you use tax planning software from a trusted source, so you may ensure the information which you provide to transmit to the IRS will be kept protected.