Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on precisely the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually give you access to all the forms that you may need if you have a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, 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 returns.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. And you’re able to 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 using the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is simple.
The way to e-file a tax return?
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — particularly with all these 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 leadership, 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 network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s important to employ a trusted service that will help you record your taxes. Chow advises not to e-file on a computer or utilize an online connection that is not confidential.
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 choices. Just make certain to use tax preparation software from a dependable source, so that you can make certain the information which you supply to transmit to the IRS will be kept secure.