Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on precisely 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. 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 workers do not need to spend time manually processing your return. And in return, you could get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.
However, what about safety? And can digital filing actually give you access to all the forms you might need if you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether 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 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 safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax documents. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.
How to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
The types do the math for you and offer standard guidance. You can simply do your federal return with these kinds.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about safety — particularly with all these data breaches. But experts agree that this is not a problem that should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to use a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or use an online connection which is not confidential.
For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain that you use tax planning software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept protected.