Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually give you access to all of the forms you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the very 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 has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is approximately 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.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, submitting 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) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax records. If something happens to your paperwork, then 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 simple.
You have four options for filing an electronically filed tax return to the IRS.
Employing online tax preparation software is far and away the preferred approach of most 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 so many data breaches. But experts agree that this is not an issue which should deter you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It’s important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection that is not private.
For many 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 choices. Just make sure to use tax preparation software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept secure.