Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely 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.
When you e-file your federal income tax return, you save the IRS cash because its employees do not need to spend time manually processing your return. In return, you can find any refund you’re owed faster, especially if you have it directly deposited to your bank account.
However, what about security? And can digital filing actually provide you access to all of the forms you may need in case you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment 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 get your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues 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 advantage when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, filing 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) will result in interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there’s 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 opt to e-file and find those benefits — and the practice of doing so is simple.
The way to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can only do your federal return with these forms.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with so many data breaches. But experts agree this isn’t a problem which should deter you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s very important to use a trustworthy service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain to 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 protected.