Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely on the same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
And in return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can electronic filing really give you access to all of the forms that you might need in case you have a intricate tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it may be the best filing choice for your requirements.
If you are thinking about e-filing, a Few of the advantages include:
- Quick confirmation your forms are 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 may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file. You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you can schedule electronic funds transfers to easily 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 Immediate pay service from your checking or savings account, submitting 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 result in penalties and interest.
Digital storage of taxation information: Submitting returns electronically means there’s an electronic copy of your tax records. So if something happens to your paperwork, you will have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this is easy.
Using online tax preparation software is far and away the preferred approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be filed 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 that this isn’t a problem which should deter you from e-filing.
“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, 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 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 of this is routed over TLS encrypted links .”
It’s very 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 many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure to use tax preparation software from a trusted source, so that you can ensure the information you provide to transmit to the IRS will be kept secure.