Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on the exact same page when it comes 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 is a win-win for taxpayers and the IRS.
In return, you could get any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all of the forms you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment 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’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: According to 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 information on problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to pay at your convenience when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily 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 choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, 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 is a digital backup of your tax documents. If something happens to your paperwork, you will 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 simple.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can simply do your federal return with all these forms.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — especially with so many data breaches. But experts agree that this is not a problem that should deter you by e-filing.
“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It is important to employ a trustworthy service that will assist you file 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 yield 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 that you use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS is going to be kept protected.