Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially 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 you may need in case you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the very best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct 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. Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there’s a digital copy of your tax records. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
You have four options 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. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — especially with so many data breaches. But experts agree that this is not an issue that should deter you from 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 sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links “
It’s very important to use a trusted service that will help you file 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 is sensible 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 certain that you use tax preparation software from a dependable source, so you can make certain the information you provide to transmit to the IRS will be kept protected.