Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
In return, you can find any refund you’re owed faster, particularly in the event that 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 that you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: 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 that your forms have arrived safely.
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 receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed yields, 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 returns.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file. You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax records. So if something happens to your paperwork, you will have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is easy.
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and offer basic advice. You can only do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated 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 safety — especially with all these data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales 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 mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a computer or use an online connection that isn’t private.
For most taxpayers, it is sensible to e-file a return since 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 sure to use tax preparation software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.