Is e-filing a better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on precisely the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about safety? And can digital filing actually give you access to all the forms that you might need if you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Direct 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 after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.
The way to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is convenient, you may be worried about security — particularly with all these data breaches. But experts agree this is not an issue 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, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections”
It is very important to employ a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an internet connection that is not confidential.
For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make certain that you use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.