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’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
But what about security? And can digital filing actually give you access to all of the forms that you might need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, 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 is easier to pay at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. And you can 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 option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax documents. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.
The way to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about safety — especially with so many data breaches. But experts agree that this isn’t a problem which should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s very important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which is not confidential.
For many taxpayers, it is sensible 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 make certain to use tax preparation software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept secure.