Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.
But what about safety? And can electronic filing actually provide you access to all the forms you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
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 not. Choosing direct deposit can also accelerate the refund process.
Reduced chance of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors 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 is easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax records. So if something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is simple.
How to e-file a tax return?
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“E-filing a tax return has turned out 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 as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security 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 trustworthy service that will help you file your taxes. Chow advises to not 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 submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax preparation software from a trusted source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.