Is e-filing really a much better way to record your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the exact same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed.
And in return, you can get any refund you are owed faster, especially if you have it directly deposited into your bank account.
But what about security? And can digital filing really provide you access to all of the forms that you may need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience 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. And you’re able to schedule electronic money 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 choice to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax documents. 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 benefits — and the practice of doing this is easy.
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide standard advice. You can simply do your federal return with all these forms.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about safety — especially with so many data breaches. But experts agree that this is not a problem that should dissuade you by 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 can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to use a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or use an online connection that is not private.
For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make sure that you use tax planning software from a trusted source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.