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 exact 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 popular because it is a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can digital filing really give you access to all the forms you might need if you’ve got a complex tax situation? Are there situations when you can not e-file? Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.
If you’re thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic 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 be given a tax refund. With e-filing, you are going to receive your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.
Digital storage of taxation data: Submitting returns electronically means there is an electronic copy of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can only do your federal return with these kinds.
Using online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with so many data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, 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 information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to use a trustworthy service that will help you record your taxes. Chow advises not to e-file on a computer or use an online connection which is not private.
For many taxpayers, it is sensible to e-file a yield 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 be sure to use tax preparation software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS is going to be kept secure.