Is e-filing a much better way to file your taxes?
Americans and the IRS might not agree about everything, but they are largely 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 save the IRS money because its workers do not have to spend time manually processing your return. In return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
But what about security? And can digital filing really give you access to all the forms that you might need in case you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the best filing choice for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation 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 your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting 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 penalties and interest.
Digital storage of tax data: Submitting returns electronically implies there is 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 get those benefits — and the practice of doing this is easy.
How to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can only do your federal return with these kinds.
Employing online tax preparation software is far and away the favored approach of most taxpayers. In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.
Is e-filing really secure?
While e-filing is convenient, you may worry about security — particularly with so many data breaches. But experts agree this isn’t an issue that should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can 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 mail.”
Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is very important to use a trusted service to assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that isn’t private.
For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices. Just make certain to use tax planning software from a trusted source, so you may make certain the information which you provide to transmit to the IRS is going to be kept secure.