Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on the exact 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 a favorite because it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing actually provide you access to all the forms that you might need if you have a complex tax situation? Are there ever situations when you can not e-file? Let’s 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 are obtained: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish 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 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience 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’re able to schedule electronic money 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing 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 penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — particularly with so many data breaches. But experts agree that this isn’t an issue which should deter you by e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to employ a trustworthy service to assist you file your taxes. Chow advises to not e-file on a computer or utilize an online connection which is not confidential.
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 options. Just be certain to use tax planning software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept secure.