Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the exact 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. E-filing is popular as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing actually give you access to all of the forms 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 needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. 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 commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means 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 get those advantages — and the practice of doing this is easy.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic advice. You can only do your federal return with these kinds.
Employing online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — particularly with all these data breaches. But experts agree that this is not a problem which should dissuade you from e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue 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 data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All of 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 utilize an online connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure to use tax planning software from a dependable source, so that you can make certain the information you supply to transmit to the IRS is going to be kept secure.