Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is popular because it’s a win-win for taxpayers and the IRS.
And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.
But what about safety? And can digital filing really provide you access to all the forms you may need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the advantages 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 confirmation your forms have been received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you are going to get your money in three weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the choice 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 fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax documents. If something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.
The forms do the math for you and provide basic guidance. You can only do your federal return with all these kinds.
Using online tax preparation 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 submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may be worried about security — especially with all these data breaches. But experts agree that this isn’t a problem which should deter you from e-filing.
“In actuality, it may 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 the IRS has put safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s important to use a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not 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 options. Just be certain that you use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept protected.