Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely 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. 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 money because its workers do not have to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing really give you access to all the forms that you might need if you’ve got a complex tax situation? Are there ever situations when you can not 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 affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS does not 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 can also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s approximately 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 issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. And you can schedule electronic money transfers to 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 option to pay your balance by making use of the IRS Direct pay service from your 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 after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is a digital copy of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is easy.
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and offer standard guidance. You can simply do your federal return with all these kinds.
Employing online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about safety — especially with all these data breaches. But experts agree that this isn’t a problem which should dissuade 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 direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It’s very important to use a trustworthy service to assist you file your taxes. Chow advises not to e-file on a computer or utilize an online connection that is not 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 effortless payment choices. Just be certain to use tax planning software from a trusted source, so that you can make certain the information which you provide to transmit to the IRS will be kept protected.