Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they’re mostly on precisely the exact same page in regards to e-filing individual income tax returns.
Nearly all individual income tax returns submitted to the IRS are e-filed. E-filing is a favorite as it is a win-win for taxpayers and the IRS.
In return, you can find any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.
However, what about security? And can digital filing actually provide you access to all of the forms that you may need if you have a complex tax situation? Are there situations when you can’t e-file? Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.
If you are Considering e-filing, some of the advantages include:
- Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund. With e-filing, you are going to receive your money in 3 weeks or not. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings. The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.
Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file. You can submit returns early and pay later if needed, provided that you pay from 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 option to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax records. So if something happens to your paperwork, then you will have a digital backup.
The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is easy.
You have four options for submitting an electronically filed tax return to the IRS.
The types do the math for you and offer basic guidance. You can simply do your federal return with these forms.
Using online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could be worried about security — especially with all these data breaches. But experts agree this isn’t a problem that should deter you by e-filing.
“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information secure. “Trainers normally use IRS specific APIs that need ab sessions,” Chow says. “All this can be routed over TLS encrypted links .”
It’s very important to use a trustworthy service to assist you record your taxes. Chow advises to not e-file on a public computer or utilize an internet connection that is not confidential.
For most taxpayers, it is sensible to e-file a yield since 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 to use tax preparation software from a trusted source, so you may ensure the information you supply to transmit to the IRS will be kept protected.