Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
In return, you could find any refund you are 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 the forms that you might need in case you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it may be the very best filing option for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day of electronic 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 may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is 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 problems discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file. You can submit returns early and pay later if necessary, 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, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, submitting 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 penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is a digital backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is simple.
How to e-file a tax return?
You have four options 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. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.
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 that this isn’t a problem that should deter you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private 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 put security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to use a trustworthy service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not private.
For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make sure to use tax preparation software from a trusted source, so that you can ensure the information you provide to transmit to the IRS will be kept protected.