Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the 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 popular because it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. In return, you could find any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.
However, what about security? And can electronic filing really provide you access to all the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of digital 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 weeks to be given a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of errors: In accordance with 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 problems discovered on e-filed yields compared with paper yields.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file. You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking account 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 result in penalties and interest.
Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with so many data breaches. But experts agree this is not a problem which should dissuade you from e-filing.
“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted links .”
It is very important to employ a trusted service to assist you record your taxes. Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.
For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain to use tax planning software from a trusted source, so that you may make certain the information which you supply to transmit to the IRS will be kept protected.