Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the 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.
And in return, you could find any refund you are owed faster, particularly if you have it directly deposited to your bank account.
But what about security? And can electronic filing actually give you access to all the forms that you might need if you’ve got a intricate tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and if it may be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm 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 be given 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 chance of errors: According to the IRS, there is 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.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, as long as 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. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, 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) will lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is an electronic backup of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
The way to e-file a tax return?
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem that should deter you from e-filing.
“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is important to employ a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection which isn’t private.
For many taxpayers, it makes sense 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 effortless payment choices. Just make sure to use tax planning software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept secure.