Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they’re 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.
When you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about safety? And can digital filing really give you access to all of the forms that you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of electronic 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 receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital copy of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.
The types do the math for you and offer basic guidance. You can simply do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — particularly with all these data breaches. But experts agree that this isn’t an issue which should deter 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 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 as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All 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 not to e-file on a public computer or utilize an internet connection that isn’t private.
For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax planning software from a dependable source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.