Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on precisely the same page in regards to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.
However, what about security? And can digital filing actually give you access to all of the forms that you may need in case you’ve got a intricate tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it might be the very 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 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 your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.
Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file. It’s possible to 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 send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking or savings account, filing 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 result in penalties and interest.
Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process 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.
The forms do the math for you and offer basic guidance. You can simply do your federal return with these kinds.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — particularly with so many data breaches. But experts agree this isn’t a problem that should dissuade 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 direction, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections”
It’s very important to employ a trustworthy service to help you record your taxes. Chow advises not to e-file on a public computer or use an online connection which is not private.
For many taxpayers, it is sensible 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 options. Just make certain that you use tax preparation software from a dependable source, so that you can make certain the information which you supply to transmit to the IRS is going to be kept secure.