Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.
However, what about safety? And can electronic filing actually provide you access to all of the forms you may need in case you have a intricate tax situation? Are there situations when you can not e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was 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 publish a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to pay 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the 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 following the filing due date (typically April 15) can result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.
The forms do the math for you and provide basic guidance. You can only do your federal return with all these forms.
Using online tax preparation software is far and away the preferred approach of the majority of taxpayers. Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — especially with so many data breaches. But experts agree that this is not an issue that should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It is very important to employ a trustworthy service to help you file your taxes. Chow advises not to e-file on a public computer or use an online connection which is not private.
For many taxpayers, it makes sense to e-file a return since 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 be sure that you use tax preparation software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept protected.