Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely 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. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really provide you access to all the forms you may need in case you have a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it might be the very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital 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 be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file. You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds 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 option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.
The types do the math for you and offer standard guidance. You can simply do your federal return with these kinds.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — particularly with so many data breaches. But experts agree this isn’t a problem that should dissuade you from e-filing.
“In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is very important to use a trusted service that will help you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not private.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain to use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept secure.