Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about safety? And can digital filing really give you access to all the forms you may need if you have a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you’re 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 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there’s 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 info on problems discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as 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. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking 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 tax data: Submitting returns electronically implies there’s a digital backup of your tax records. So if something happens to your paperwork, then 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 so is simple.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — especially with so many data breaches. But experts agree this isn’t a problem which 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, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t confidential.
For most taxpayers, it makes sense to e-file a return since 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 be sure that you use tax planning software from a dependable source, so you may ensure the information you supply to transmit to the IRS will be kept secure.