Is e-filing really a better way to file your taxes?
Americans and the IRS might not agree about everything, but they’re mostly on the same page in regards 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’s a win-win for taxpayers and the IRS.
In return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.
But what about security? And can electronic filing really give you access to all 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 option for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you publish a paper filing, it may take six to eight months to receive 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 procedure.
Reduced likelihood of errors: In accordance with the IRS, there is 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 returns compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. You can submit returns early and pay afterwards if necessary, 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 the 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 tax data: Submitting returns electronically means there’s a digital backup of your tax records. So if something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
The forms do the math for you and offer standard guidance. You can only do your federal return with all these forms.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, 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 may be worried about security — especially with all these data breaches. But experts agree this isn’t an issue which should dissuade you by e-filing.
“In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this is routed over TLS encrypted connections.”
It’s very important to employ a trustworthy service to assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection which is not private.
For most taxpayers, it is sensible to e-file a yield 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 that you use tax preparation software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept secure.