Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree on 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 a favorite because it is a win-win for taxpayers and the IRS.
And in return, you could get any refund you are owed faster, especially if you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually give you access to all the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay from 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. Additionally you have the option to pay your balance by using the IRS Immediate pay service from the 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 after the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.
The way to e-file a tax return?
The types do the math for you and provide standard guidance. You can simply do your federal return with all these forms.
Employing 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 secure?
While e-filing is suitable, you could worry about safety — particularly with all these data breaches. But experts agree this is not a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “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 mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t private.
For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain that you use tax preparation 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.