Is e-filing a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the exact same page when it comes 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.
If you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, 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 the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you are going to 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 is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to 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 Immediate pay service from your checking or savings account, filing 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) will lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
The way to e-file a tax return?
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — particularly with so many data breaches. But experts agree this is not an issue which should deter you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information secure. “Vendors typically utilize IRS specific 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 assist you file your taxes. Chow advises not to e-file on a public computer or use an online connection that is not private.
For many taxpayers, it is sensible to e-file a yield because 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 make certain that you use tax planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS is going to be kept secure.