Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
In return, you can find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.
But what about security? And can electronic filing really provide you access to all the forms you may need in case you’ve got a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.
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 was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment 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’ll get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. Additionally you have the option 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 fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.
The way to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
The types do the math for you and offer basic advice. You can only do your federal return with all these forms.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree that this is not an issue which should deter you by e-filing.
“In actuality, it may 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 the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to employ a trustworthy service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that is not confidential.
For many taxpayers, it makes sense to e-file a return 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 certain that you use tax preparation software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept protected.