Is e-filing a better way to record your taxes?
Americans and the IRS may not agree on everything, but they are largely on the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns filed to the IRS are e-filed.
If 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. And in return, you can get any refund you’re owed faster, especially if you have it directly deposited into your bank account.
However, what about safety? And can electronic filing really provide you access to all the forms you may need in case you’ve got a complex tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.
If you’re thinking about e-filing, some of the advantages include:
- Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of electronic submission. For paper filers, the IRS doesn’t send any acknowledgment that 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 get your money in 3 weeks or less. Choosing direct deposit can also speed up the refund process.
Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.
Simple payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file. It’s possible to submit returns early and pay later if needed, 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 Direct 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.
Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax records. If something happens to your paperwork, then you will have a digital backup.
The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so is simple.
How to e-file a tax return?
Using online tax prep 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 program.
Is e-filing really secure?
While e-filing is convenient, you could be worried about security — especially with so many data breaches. But experts agree that this isn’t an issue which should dissuade you by 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 fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your information safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this can be routed over TLS encrypted connections.”
It’s important to use a trusted service to help you record 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 because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just be certain that you use tax planning software from a dependable source, so that you may make certain the information you provide to transmit to the IRS is going to be kept secure.