Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly 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.
And in return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.
However, what about safety? And can electronic filing actually provide you access to all the forms you may need in case you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it might be the very best filing choice for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital 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 months to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced likelihood of mistakes: In accordance with the IRS, there is 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 returns.
Simple payment process: If you owe the IRS money, it’s easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. You also have the option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there’s a digital copy of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing this is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax prep software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it anticipated over four 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 — especially with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It is very important to employ a trusted service that will assist you file your taxes. Chow advises not to e-file on a computer or use an online connection which isn’t private.
For many taxpayers, it makes sense 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 effortless payment choices. Just be certain to use tax planning software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept protected.