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 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. E-filing is popular as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.
But what about safety? And can electronic filing really provide you access to all of the forms that you might need if 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 if it might be the best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of electronic 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 receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking account 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 penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there is a digital copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is simple.
The way to e-file a tax return?
The types do the math for you and offer standard advice. You can only do your federal return with these kinds.
Using online tax prep 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 secure?
While e-filing is suitable, you may worry about safety — particularly with so many data breaches. But experts agree that this isn’t a problem that should deter you by e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It is very important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t private.
For most taxpayers, it makes sense to e-file a yield since it is 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 preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS is going to be kept protected.