Is e-filing really a better way to record your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the 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 is a win-win for taxpayers and the IRS.
And in return, you could get any refund you are owed quicker, especially if you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all the forms 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 may be the best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been 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 that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your advantage 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’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking or savings account, 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 tax information: Submitting returns electronically means there’s a digital copy of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is easy.
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide standard advice. You can simply do your federal return with all these kinds.
Employing online tax preparation software is far and away the preferred approach of the majority of 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 convenient, you could be worried about security — particularly with all these data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to employ a trustworthy service to assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection which isn’t private.
For most taxpayers, it makes sense 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 easy payment options. Just make certain to use tax planning software from a dependable source, so you may make certain the information you supply to transmit to the IRS will be kept protected.