Is e-filing really a better way to record your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you could find any refund you are owed quicker, especially if you have it directly deposited to your bank account.
But what about security? And can electronic filing actually provide you access to all of the forms you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight weeks 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 errors: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is a digital backup of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is simple.
You have four options for filing an electronically filed tax return to the IRS.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree that this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very 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 since you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to use a trusted service that will assist you file your taxes. Chow advises to not e-file on a public computer or use an online connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure that you use tax planning software from a trusted source, so you may ensure the information you provide to transmit to the IRS is going to be kept protected.