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 precisely 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.
If you e-file your federal income tax return, you conserve the IRS money because its employees don’t need to spend time manually processing your return. In return, you could find any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing really give you access to all of the forms that you may need in case you have 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 may be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not 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 may also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic funds 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. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide basic guidance. You can simply do your federal return with these kinds.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — particularly with all these data breaches. But experts agree that this is not a problem which should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal 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 set safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is important to employ a trusted service that will help you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not private.
For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure that you use tax planning software from a trusted source, so that you can ensure the information you provide to transmit to the IRS will be kept secure.