Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on the exact 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’s a win-win for taxpayers and the IRS.
In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.
But what about safety? And can digital filing really provide you access to all the forms you may need if you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is 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 info on problems discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem which should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system 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 data secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s important to employ a trusted service to help you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not confidential.
For most taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax preparation software from a trusted source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept protected.