Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they’re mostly 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.
And in return, you could find any refund you’re owed faster, especially if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing actually provide you access to all the forms you might need if you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let us 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 affirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file. You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, 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) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and provide basic advice. You can only do your federal return with these forms.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s very important to use a trusted service that will help you file your taxes. Chow advises not to e-file on a public computer or use an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept protected.