Is e-filing a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are largely on precisely the same page in regards to e-filing individual income tax returns.
The majority of 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.
If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.
But what about security? And can digital filing actually provide you access to all the forms you might need in case you’ve got a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been 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 weeks to receive a tax refund. With e-filing, you are going to receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.
Simple payment procedure: If you owe the IRS money, it is easier 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. You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, 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) can lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax documents. So if something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is simple.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, 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 could worry about security — particularly with all these data breaches. But experts agree that this is not a problem that should dissuade you by e-filing.
“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s very important to use a trusted service that will assist you record your taxes. Chow advises not to e-file on a computer or utilize an internet connection that is not private.
For most taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices. Just be certain to use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.