Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely 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.
And in return, you can find any refund you are owed faster, particularly if you have it directly deposited into your bank accounts.
But what about security? And can digital filing really provide you access to all of the forms you might need in case you have a complex tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to cover 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. And you can schedule electronic funds transfers to 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 Immediate pay service from your checking or savings accounts, filing 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 result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax prep 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 submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about safety — especially with all these data breaches. But experts agree this isn’t an issue which should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains 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 important to employ a trustworthy service that will help you record your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
For many 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 effortless payment choices. Just be sure that you use tax planning software from a dependable source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.