Is e-filing a better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you save the IRS money because its employees do not need 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.
But what about safety? And can electronic filing really give you access to all of the forms that you might need if you have a complex tax situation? Are there ever 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 are thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.
Simple payment process: 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 afterwards if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, 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) will lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax records. If something happens to your paperwork, 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 simple.
You have four choices for submitting an electronically filed tax return to the IRS.
The types do the math for you and provide standard advice. You can simply do your federal return with these kinds.
Using online tax prep software is far and away the favored 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 secure?
While e-filing is convenient, you may worry about security — especially with so many data breaches. But experts agree this is not an issue which should deter you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information safe. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It is important to use a trusted service to help you record your taxes. Chow advises to not e-file on a computer or use an internet connection which isn’t private.
For many taxpayers, it is sensible 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 effortless payment choices. Just make sure to use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.