Is e-filing a much better way to file your taxes?
Americans and the IRS might not agree about 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 filed to the IRS are e-filed. E-filing is popular as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all of the forms you may need in case you’ve got 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 very best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
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 can also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s approximately 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 issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you can 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 option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, 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 an electronic backup of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may be worried about security — particularly with so many data breaches. But experts agree this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is important to use a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which isn’t confidential.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure to use tax planning software from a dependable source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.