Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed 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 can get any refund you are owed quicker, especially if you have it directly deposited into your bank account.
However, what about safety? And can digital filing actually provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing was 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 publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from your checking or savings accounts, filing 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) will result in interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there’s an electronic copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
The way to e-file a tax return?
The forms do the math for you and offer standard advice. You can only do your federal return with all these forms.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree this is not an issue which should deter you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s important to use a trusted service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that 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 make certain that you use tax preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept protected.