Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on 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.
In return, you can get any refund you are owed faster, particularly if you have it directly deposited to your bank account.
However, what about security? And can digital filing really give you access to all of the forms you may need if you’ve got a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your needs.
If you are thinking about e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you’ll get your money in three weeks or not. Choosing direct deposit may also speed up the refund procedure.
Reduced chance of mistakes: 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 info on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, then you’ll have an electronic backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is easy.
You have four choices for submitting an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the favored approach of most taxpayers. Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is convenient, you could be worried about security — particularly with all these data breaches. But experts agree that this is not a problem which should dissuade 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, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s important to employ a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or use an internet connection that is not private.
For most taxpayers, it is sensible to e-file a return because it’s 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 trusted source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.