Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree about everything, but they are largely 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. E-filing is popular because it’s a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.
However, what about safety? And can electronic filing really provide you access to all of the forms that you might need in case you have a intricate tax situation? Are there situations when you can not e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your needs.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived .
Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you are going to get your money in 3 weeks or less. Choosing direct deposit may also accelerate the refund process.
Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.
Easy payment process: If you owe the IRS money, it is easier to pay at your convenience when you e-file. It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline. And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax documents. So if something happens to your paperwork, you will have an electronic backup.
The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this 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 preferred approach of most taxpayers. Actually, the IRS says it expected over four tax returns to be submitted through tax return prep program.
Is e-filing really secure?
While e-filing is convenient, you may worry about safety — especially with so many data breaches. But experts agree that this is not an issue which should deter 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, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your information secure. “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says. “All of this can be routed over TLS encrypted connections”
It is important to use a trusted service to help you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that is not confidential.
For many taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be certain that you use tax planning software from a dependable source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.