Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank accounts.
But what about safety? And can digital filing really provide you access to all the forms you might need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your needs.
If you are Considering e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day 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 can take six to eight months to receive a tax refund. With e-filing, you are going to receive your money in three weeks or less. Choosing direct deposit may 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 info on issues discovered on e-filed yields compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. You also have the option to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting 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 information: Submitting returns electronically means there’s a digital copy of your tax records. So if something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about safety — especially with so many data breaches. But experts agree that this isn’t an issue that should deter 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 direction, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information secure. “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 trusted service that will assist you record your taxes. Chow advises to not e-file on a computer or utilize an online connection that is not private.
For most 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 make sure to use tax preparation software from a trusted source, so you can ensure the information you supply to transmit to the IRS will be kept protected.