Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing actually provide you access to all the forms that you might need in case you have a complex tax situation? Are there 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’re Considering e-filing, a Few of the advantages include:
- Quick affirmation 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 safely.
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic funds 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, filing 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 interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax records. If something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is simple.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — particularly with so many data breaches. But experts agree this isn’t an issue that 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 fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It is very important to employ a trustworthy service to help you file your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.
For many taxpayers, it is sensible to e-file a return because 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 be sure to use tax preparation software from a trusted source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.