Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the 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 popular because it’s a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing really give you access to all of the forms you might need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the best filing option for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage if you e-file. You can submit returns early and pay afterwards 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 Immediate pay service from your checking account 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 following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax 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 find those advantages — and the process of doing so is simple.
How to e-file a tax return?
The types do the math for you and offer standard guidance. You can only do your federal return with all these kinds.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could worry about safety — particularly with so many data breaches. But experts agree that this isn’t an issue which should deter you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to use a trusted service to help you file your taxes. Chow advises to not e-file on a computer or use an internet connection that isn’t confidential.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax planning software from a dependable source, so you can ensure the information which you supply to transmit to the IRS will be kept protected.