Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re 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. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. In return, you can get any refund you’re owed faster, especially if you have it directly deposited into your bank account.
However, what about safety? And can digital filing really provide you access to all the forms you might need if 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 whether it might be the best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. 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 yields, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds 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 using the IRS Direct pay service from your checking account 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 after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation information: Submitting returns electronically implies there is an electronic backup of your tax documents. If something happens to your paperwork, you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is easy.
You have four choices for filing an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may worry about security — especially with so many data breaches. But experts agree that this is not a problem which should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may 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 mail.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to employ a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
For many taxpayers, it is sensible to e-file a yield 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 certain that you use tax preparation software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept protected.