Is e-filing a better way to file your taxes?
Americans and the IRS may not agree on everything, but they are 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 popular as it is a win-win for taxpayers and the IRS.
And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really provide you access to all of the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you submit a paper filing, it may 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 not. Choosing direct deposit can also accelerate the refund procedure.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that 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, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there is an electronic 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 find those benefits — and the practice of doing so is simple.
The forms do the math for you and provide standard guidance. You can only do your federal return with these kinds.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is suitable, you could be worried about safety — especially with all these 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 an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your information 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 ab sessions,” Chow says. “All this is routed over TLS encrypted links “
It is important to employ a trusted service to assist you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection which is not confidential.
For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just make sure that you use tax preparation software from a dependable source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept protected.