Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could find any refund you’re owed faster, particularly if you have it directly deposited into your bank account.
But what about safety? And can electronic filing actually provide you access to all of the forms that you may need if you have a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there is around a 1 percent error rate on e-filed yields, 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’s easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, provided that 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. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, 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 interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there is a digital backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is easy.
The way to e-file a tax return?
You have four choices for filing an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — particularly with all these data breaches. But experts agree this is not a problem that should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data 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’s important to employ a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an online connection which isn’t private.
For most taxpayers, it makes sense to e-file a yield because 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 certain that you use tax preparation software from a dependable source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.