Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about 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 submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank accounts.
But what about security? And can digital filing actually give you access to all the forms that you may need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the very best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 .
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 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors 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 advantage when you e-file. You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic funds 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 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 fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
The way to e-file a tax return?
The types do the math for you and provide basic guidance. You can only do your federal return with these kinds.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — particularly with all these data breaches. But experts agree this is not a problem that should dissuade you from 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, 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, clarifies that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is very important to employ a trusted service that will help you file your taxes. Chow advises to not e-file on a computer or use an online connection that is not 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 be sure to use tax planning software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS will be kept protected.