Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing actually give you access to all of the forms you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the very best filing choice for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation 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 that your forms have arrived safely.
Timely refunds: When you publish 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 3 weeks or less. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: In accordance with the IRS, there’s 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 pay at your advantage when you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing 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 means there’s an electronic backup of your tax documents. 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 process of doing this is easy.
How to e-file a tax return?
You have four choices for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide basic advice. You can simply do your federal return with all these kinds.
Using online tax prep software is far and away the favored 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 convenient, you could be worried about security — particularly with all these data breaches. But experts agree that this isn’t a problem which 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 direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It is important to employ a trustworthy service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not confidential.
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 choices. Just be sure that you use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.