Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are 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.
When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually provide you access to all of the forms you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: 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 your forms have arrived .
Timely refunds: When you submit a paper filing, it may 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 accelerate the refund process.
Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you can schedule electronic money 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. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
The types do the math for you and provide basic guidance. You can simply do your federal return with all these forms.
Employing online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — particularly with so many data breaches. But experts agree that this is not an issue which should dissuade you from 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 leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal 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 safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to employ a trusted service to help you record 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 easy payment choices. Just be sure that you use tax planning software from a dependable source, so you may ensure the information which you supply to transmit to the IRS is going to be kept secure.