Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular because it is a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
But what about security? And can electronic filing actually provide you access to all the forms you might need if you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within one day 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 receive a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. And you can schedule electronic money transfers to 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 Direct pay service from your checking account or savings accounts, 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) will result in penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and offer standard advice. You can only do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — particularly with so many data breaches. But experts agree that this is not a problem that should dissuade you from e-filing.
“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to employ a trusted service that will help you file your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a return since it’s 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 that you use tax planning software from a dependable source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept protected.