Is e-filing a better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
And in return, you could find any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.
But what about security? And can electronic filing actually give you access to all of the forms you may need if you’ve got a intricate tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and if it may be the very best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of electronic 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 can take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file. You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Immediate 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 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 an electronic backup of your tax documents. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.
The forms do the math for you and provide basic advice. You can only do your federal return with these forms.
Employing online tax prep software is far and away the preferred approach of most taxpayers. Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may worry about safety — particularly with all these data breaches. But experts agree this is not a problem that should dissuade you from e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure. “Trainers normally use IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It’s important to use a trusted service that will assist you file your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not confidential.
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 easy payment choices. Just be sure that you use tax preparation software from a trusted source, so you may make certain the information you supply to transmit to the IRS will be kept secure.