Is e-filing a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If 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, particularly in the event that you have it directly deposited into your bank account.
However, what about security? And can digital filing actually give you access to all of the forms that you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm 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 safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically means there’s an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
The way to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
The types do the math for you and provide basic advice. You can only do your federal return with these kinds.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — especially with so many data breaches. But experts agree this is not an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or use an online connection that is not confidential.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure to use tax planning software from a dependable source, so you can make certain the information which you provide to transmit to the IRS is going to be kept protected.