Is e-filing really a better way to file your taxes?
Americans and the IRS may 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 filed to the IRS are e-filed. E-filing is popular as it is a win-win for taxpayers and the IRS.
In return, you can find any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.
But what about security? And can electronic filing actually give you access to all of the forms you might need if you have a complex tax situation? Are there situations when you can not e-file? Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will confirm a tax filing has been 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 may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there’s 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 information on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you’re able to 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. You also 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 commission, 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 information: Submitting returns electronically means there’s an electronic backup of your tax documents. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is simple.
The way to e-file a tax return?
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 tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you could worry about security — particularly with all these data breaches. But experts agree this is not an issue that should deter 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 may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says. “All of this can be 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 utilize an internet connection which isn’t private.
For most taxpayers, it is sensible to e-file a yield 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 be certain to use tax planning software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS will be kept protected.