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 same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you could get any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing actually give you access to all of the forms that you might need if you’ve got a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
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’ll receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, provided that 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 choice to pay your balance by using 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 result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
You have four choices for filing an electronically filed tax return to the IRS.
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 in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree that this is not a problem that should deter you by e-filing.
“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system 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. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It’s very important to employ a trusted service to help you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection which is not private.
For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax planning software from a dependable source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.