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 the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.
But what about safety? And can electronic filing actually provide you access to all the forms that you may need if you’ve got a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.
If you’re Considering e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic 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 can take six to eight months to receive 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 likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file. You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, 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 lead to penalties and interest.
Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax documents. If something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.
The forms do the math for you and offer standard advice. You can only do your federal return with all these forms.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with so many data breaches. But experts agree that this isn’t a problem which should deter you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s very important to use a trustworthy service to assist you file your taxes. Chow advises not to e-file on a public computer or utilize an internet connection which isn’t private.
For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax planning software from a trusted source, so that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.