Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of 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.
When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly if you have it directly deposited into your bank account.
However, what about security? And can electronic filing really give you access to all of the forms you may need in case you’ve got a intricate 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 choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been 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 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 not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is around 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 yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account 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 means there’s an electronic backup of your tax documents. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and provide standard advice. You can simply do your federal return with all these kinds.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter you by e-filing.
“In actuality, it can 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 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. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not private.
For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain that you use tax planning software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS will be kept protected.