Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are 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. E-filing is popular as it is a win-win for taxpayers and the IRS.
In return, you could get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing really provide you access to all the forms you may need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let us look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day 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 may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed 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 is easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, as long as 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 your checking account 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 after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.
The way to e-file a tax return?
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.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — particularly with all these data breaches. But experts agree that this is not a problem which should deter you by e-filing.
“In actuality, it can be more secure than paper filing as 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, explains the IRS has put security 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 is important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an internet 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 effortless payment options. Just be sure to use tax preparation software from a trusted source, so you can ensure the information which you supply to transmit to the IRS is going to be kept protected.