Is e-filing a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly 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.
In return, you could find any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing really give you access to all of the forms you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit 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 three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: According to the IRS, there’s around a 1% 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 yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage when you e-file. You can submit returns early and pay later if needed, provided that 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, 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 the checking account or savings accounts, filing 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) will result in interest and penalties.
Digital storage of tax data: Submitting returns electronically implies there’s an electronic copy of your tax documents. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is simple.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
Using online tax preparation software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — particularly with so many data breaches. But experts agree that this is not an issue which should deter you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says. “All this is routed over TLS encrypted links .”
It’s important to use a trustworthy service that will assist you file your taxes. Chow advises to not e-file on a public computer or use an internet connection that isn’t confidential.
For many taxpayers, it is sensible to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept protected.