Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they’re largely on the same page in regards 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 as it is a win-win for taxpayers and the IRS.
And in return, you can get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.
But what about security? And can digital filing really give you access to all the forms that you may need if you’ve got a complex tax situation? Are there situations when you can’t e-file? Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.
If you are thinking about e-filing, some of the advantages include:
- Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital submission. For paper filers, the IRS does not send any acknowledgment your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund. With e-filing, you’ll get your money in 3 weeks or less. Choosing direct deposit may also speed up the refund process.
Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent 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 returns compared with paper yields.
Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file. It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. Additionally you 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 fee, or paying by check or money order. Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.
Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax records. If something happens to your paperwork, you’ll have a digital backup.
The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is simple.
The way to e-file a tax return?
You have four options for filing an electronically filed tax return to the IRS.
Employing online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.
Is e-filing really stable?
While e-filing is suitable, you could worry about safety — especially with so many 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 direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”
Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe. “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says. “All this is routed over TLS encrypted connections”
It’s important to use a trusted service that will help you record your taxes. Chow advises to not e-file on a computer or utilize an internet connection that is not private.
For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options. Just make certain that you use tax planning software from a dependable source, so you can ensure the information you provide to transmit to the IRS will be kept protected.