Is e-filing really a much 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.
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.
If you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
However, what about security? And can digital filing actually provide you access to all of the forms you might need if you have a intricate 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 needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit may also accelerate the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings. The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file. You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline. You also have the choice to pay your balance by using 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 tax data: Submitting returns electronically means there is an electronic backup of your tax records. If something happens to your paperwork, you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree that this isn’t a problem that should dissuade you by e-filing.
“E-filing a tax return has proven 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 as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”
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 specific APIs that need ab sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to use a trustworthy service to help you record your taxes. Chow advises to not e-file on a public computer or use an internet connection which isn’t private.
For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain to use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.