Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually provide you access to all the forms that you may need in case you have a intricate 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 best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation 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 doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple 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, 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. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, 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) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there’s a digital backup 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 advantages — and the practice of doing so is easy.
You have four choices for filing an electronically filed tax return to the IRS.
The forms do the math for you and offer standard advice. You can simply do your federal return with all these forms.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter you from 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, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s very important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a public computer or use an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just be certain to use tax planning software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS will be kept secure.