Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly 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 because 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 workers do not have to spend time manually processing your return. And in return, you could get any refund you’re owed faster, especially if you have it directly deposited into your bank account.
However, what about security? And can electronic filing actually give you access to all of the forms that you might need if you’ve got 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 might be the very best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of digital 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 may 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 procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s 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 issues discovered on e-filed yields compared with paper returns.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there is an electronic backup of your tax documents. If something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
The forms do the math for you and offer standard guidance. You can simply do your federal return with all these forms.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — especially with so many data breaches. But experts agree this isn’t an issue that should deter 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 can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this is routed over TLS encrypted links “
It’s very important to employ a trusted service to help you file your taxes. Chow advises to not e-file on a public computer or use an online connection which is not confidential.
For most taxpayers, it is sensible to e-file a yield since it’s 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 dependable source, so that you can make certain the information you provide to transmit to the IRS will be kept secure.