Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed.
In return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank account.
But what about security? And can electronic filing really provide you access to all of the forms you might need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day 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 are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of mistakes: In accordance with the IRS, there is 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 problems discovered on e-filed returns compared with paper yields.
Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience when you e-file. It’s possible to 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 the checking 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 after the filing due date (typically April 15) will result in interest and penalties.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup 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 get those advantages — and the practice of doing so is easy.
You have four options for submitting an electronically filed tax return to the IRS.
The forms do the math for you and provide standard advice. You can only do your federal return with all these forms.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about security — especially with so many data breaches. But experts agree that this is not an issue which should dissuade you by e-filing.
“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your data secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is very important to employ a trusted service that will help you record your taxes. Chow advises not to e-file on a public computer or use an internet connection which isn’t private.
For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make sure to use tax planning software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept secure.