Is e-filing a better way to record your taxes?
Americans and the IRS might not agree on everything, but they’re largely 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 because it is a win-win for taxpayers and the IRS.
In return, you could find any refund you are owed faster, particularly if you have it directly deposited into your bank account.
But what about security? And can digital filing really give you access to all the forms you might need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital 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 be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is simpler 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. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s a digital backup of your tax documents. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.
You have four choices for filing an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — especially with all these data breaches. But experts agree that this isn’t an issue which should deter you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s very important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not private.
For most taxpayers, it makes sense to e-file a return 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 sure to use tax planning software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept protected.