Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely 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 a favorite as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you could find any refund you are owed quicker, 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 you may need if 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 may be the very best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours 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’ll get your money in three weeks or less. Choosing direct deposit can also accelerate the refund procedure.
Reduced likelihood of mistakes: 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 issues discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it is simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax records. So if something happens to your paperwork, then you’ll 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 simple.
How to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can only do your federal return with all these forms.
Employing online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may worry about safety — particularly with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections.”
It is important to employ a trustworthy service that will assist you record your taxes. Chow advises to not e-file on a public computer or utilize an online connection which isn’t confidential.
For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax planning software from a trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept protected.