Is e-filing a much better way to record your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could get any refund you are owed quicker, 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’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it may be the best filing choice for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours 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 months to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also accelerate 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% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate 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 after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, 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 types do the math for you and provide standard advice. You can only do your federal return with these kinds.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — especially with so many data breaches. But experts agree that this isn’t a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or use an online connection that isn’t confidential.
For many 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 make certain that you use tax preparation software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept protected.