Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re mostly on the exact 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.
When 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. In return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.
However, what about security? And can electronic filing actually give you access to all the forms you might need if you’ve got a intricate tax situation? Are there ever situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours 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 months 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 errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, 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 returns.
Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline. And you can schedule electronic money 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 choice to pay your balance by making use of the IRS Immediate pay service from your checking account 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 after the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically means there’s a digital backup of your tax documents. So if something happens to your paperwork, you’ll have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
You have four options for filing an electronically filed tax return to the IRS.
The forms do the math for you and provide basic advice. You can simply do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you may be worried about security — particularly with so many data breaches. But experts agree that this is not an issue that should deter you from e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data secure. “Trainers normally use IRS specific APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted links “
It’s very important to employ a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or utilize an online connection that is not confidential.
For many taxpayers, it is sensible 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 easy payment options. Just be sure to use tax preparation software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.