Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the exact 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.
And in return, you can find any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
However, what about safety? And can electronic filing really provide you access to all the forms that you might need if you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you’re 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 doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience when you e-file. You can submit returns early and pay later if needed, as long as you pay from 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 choice to pay your balance by making use of the IRS Immediate pay service from the checking account 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 following the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is easy.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could 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.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is very important to use a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which is not confidential.
For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept secure.