Is e-filing really a much better way to record your taxes?
Americans and the IRS might not agree about everything, but they are largely on the same page when it comes 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 could find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.
But what about safety? And can digital filing actually give you access to all the forms you might need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and if it may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of errors: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, 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 lead to penalties and interest.
Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax documents. If something happens to your paperwork, you’ll have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.
How to e-file a tax return?
Using online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree that this isn’t a problem which should dissuade you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since 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 the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says. “All this is routed over TLS encrypted links “
It’s important to use a trusted service to help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which isn’t confidential.
For many taxpayers, it makes sense to e-file a return because it’s 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 dependable source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.