Is e-filing a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
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 give you access to all of the forms that you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it may be the very best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm 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 safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. And you can schedule electronic money transfers to 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 or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
How to e-file a tax return?
You have four options 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 preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It is important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an internet connection that is not private.
For many taxpayers, it makes sense 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 effortless payment options. Just make certain that you use tax planning software from a trusted source, so you may make certain the information you supply to transmit to the IRS is going to be kept secure.