Is e-filing really a better way to record 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.
In return, you can get any refund you are owed faster, especially if you have it directly deposited into your bank account.
However, what about security? And can digital filing really give you access to all the forms you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may 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 confirm 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 .
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’ll get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to 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 issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there is an electronic backup of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is simple.
The forms do the math for you and provide standard advice. You can only do your federal return with these kinds.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — particularly with all these data breaches. But experts agree that this isn’t an issue which should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is very important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not private.
For most taxpayers, it makes sense 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 effortless payment options. Just be sure that you use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept secure.