Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are mostly on precisely the same page when it comes 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 as it’s a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. And in return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really give you access to all the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and if it might be the best filing option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
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 not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with 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 yields.
Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. And you can 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. Additionally you have the option to pay your balance by using the IRS Immediate 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 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 a digital backup of your tax records. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.
The types do the math for you and offer basic advice. You can only do your federal return with these forms.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over 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 security — particularly with all these data breaches. But experts agree that this is not an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It is important to use a trusted service that will assist you record your taxes. Chow advises to not e-file on a public computer or use an internet connection that isn’t private.
For most taxpayers, it makes sense 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 choices. Just be sure that you use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS will be kept protected.