Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on 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.
And in return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank account.
However, what about security? And can digital filing actually provide you access to all the forms you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically implies there’s an electronic copy of your tax records. So if something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.
How 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. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you may be worried about safety — particularly with all these data breaches. But experts agree this isn’t an issue that should dissuade you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It is important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a public computer or use an online connection which isn’t private.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless 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 secure.