Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they are mostly on the exact 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 because it is a win-win for taxpayers and the IRS.
When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you could find any refund you’re owed faster, particularly if you have it directly deposited into your bank accounts.
But what about safety? And can digital filing really give you access to all the forms you might need in case you’ve got a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it might be the very best filing option for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived .
Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is simpler to cover at your convenience when you e-file. You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your 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 following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is an electronic copy of your tax records. So if something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is simple.
You have four options for submitting an electronically filed tax return to the IRS.
Using online tax prep software is far and away the preferred approach of most taxpayers. In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — especially with all these data breaches. But experts agree that this isn’t an issue that should deter you from e-filing.
“E-filing a tax return has turned out to be a very 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 system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says. “All of this is routed over TLS encrypted links “
It’s very important to use a trusted service that will assist you file your taxes. Chow advises not to e-file on a public computer or use an internet connection which is not private.
For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just make certain to use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS will be kept protected.