Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing really give you access to all of the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let us look at the advantages of e-filing, and if it may be the very best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline. And you’re able to 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 Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax data: Submitting returns electronically implies there’s a digital copy of your tax records. So if something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — particularly with so many data breaches. But experts agree that this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain to use tax preparation software from a trusted source, so you can make certain the information you provide to transmit to the IRS is going to be kept secure.