Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on precisely the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. And in return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.
But what about security? And can digital filing really provide you access to all the forms that you might need in case you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and whether 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 are obtained: The IRS will confirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
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’ll get your money in three weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic money 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 option to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s an electronic 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 benefits — and the process of doing this is simple.
The way to e-file a tax return?
You have four options for filing 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 all these forms.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about safety — particularly with so many data breaches. But experts agree this isn’t an issue which should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an online connection that isn’t confidential.
For many taxpayers, it is sensible 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 easy payment choices. Just be certain that you use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.