Is e-filing really a much better way to file your taxes?
Americans and the IRS might not agree on everything, but they are largely on precisely 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 a favorite as it’s a win-win for taxpayers and the IRS.
In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.
But what about security? And can electronic filing actually provide you access to all the forms that you may need in case you have a complex tax situation? Are there ever situations when you can not e-file? Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.
If you’re Considering e-filing, a Few of the advantages include:
- Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours 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 months to receive a tax refund. With e-filing, you’ll receive your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings. The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.
Simple payment process: If you owe the IRS money, it is easier to pay at your advantage when you e-file. It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline. And you can schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. 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, 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) can lead to penalties and interest.
Digital storage of taxation information: Submitting returns electronically implies there is a digital backup of your tax records. If something happens to your paperwork, then you’ll have a digital backup.
The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is simple.
The forms do the math for you and provide basic guidance. You can only do your federal return with all these forms.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you may be worried about safety — 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 turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”
Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your data safe. “Trainers normally use IRS particular APIs that require token sessions,” Chow says. “All of this can be routed over TLS encrypted connections.”
It’s important to use a trusted service to assist you file your taxes. Chow advises not to e-file on a computer or utilize an internet connection that isn’t confidential.
For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure that you use tax preparation software from a trusted source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.