Is e-filing a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can digital filing actually provide you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. You can submit returns early and pay later if necessary, provided that 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 your checking 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 implies there is a digital backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is simple.
You have four choices for filing an electronically filed tax return to the IRS.
The types do the math for you and offer basic advice. You can simply do your federal return with all these kinds.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with so many data breaches. But experts agree that this is not a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to use a trustworthy service to assist you record your taxes. Chow advises not to e-file on a computer or use an internet connection which is not confidential.
For many taxpayers, it makes sense to e-file a return 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 be sure to use tax planning software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept secure.