Is e-filing a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite because it’s a win-win for taxpayers and the IRS.
And in return, you could find any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.
However, what about security? And can electronic filing really give you access to all the forms that you may need in case you have a complex tax situation? Are there situations when you can’t e-file? Let us look at the benefits of e-filing, and whether it might be the best filing option for your needs.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours 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 can take six to eight weeks to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.
Easy payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file. It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline. And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the 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) can lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically implies there’s a digital copy of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is simple.
You have four choices for submitting an electronically filed tax return to the IRS.
The types do the math for you and provide standard guidance. You can only do your federal return with all these forms.
Using online tax prep software is far and away the preferred approach of the majority of taxpayers. In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may be worried about safety — especially with all these data breaches. But experts agree that this is not a problem which should deter 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 system rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says. “All this is routed over TLS encrypted links .”
It is very important to use a trustworthy 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 confidential.
For many 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 options. Just be certain that you use tax preparation software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS will be kept protected.