Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.
However, what about security? And can digital filing actually give you access to all of the forms that you may need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit can also accelerate the refund process.
Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline. And you’re able to schedule electronic funds 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 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) will result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital copy of your tax documents. So if something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.
How to e-file a tax return?
The forms do the math for you and offer basic advice. You can only do your federal return with these forms.
Employing online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you may worry about security — especially with all these data breaches. But experts agree that this is not an issue that should dissuade you by e-filing.
“In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information 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 data secure. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted links “
It is important to employ a trusted service to help you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not confidential.
For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure to use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept secure.