Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re largely on the exact 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.
If you e-file your federal income tax return, you conserve the IRS cash because its workers do not have to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
But what about safety? And can electronic filing actually give you access to all the forms you might need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it may be the very best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation 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 safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately 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’s easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is simple.
The types do the math for you and provide basic advice. You can only do your federal return with all these kinds.
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 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 — particularly with so many data breaches. But experts agree that this is not a problem that should deter you by 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 sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It is important to use a trusted service to assist you record your taxes. Chow advises not to e-file on a computer or utilize an online connection which isn’t private.
For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be sure to use tax planning software from a trusted source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.