Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.
However, what about security? And can digital filing actually provide you access to all of the forms you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are 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 your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately 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 returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience if 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 option to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is easy.
How to e-file a tax return?
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — especially with all these data breaches. But experts agree that this isn’t 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,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to use a trustworthy service that will help you record your taxes. Chow advises not to e-file on a computer or use an online connection that is not private.
For most taxpayers, it is sensible to e-file a return because 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 that you use tax planning software from a trusted source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.