Is e-filing really a much better way to file your taxes?
Americans and the IRS may not agree on everything, but they are mostly on precisely the exact same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns submitted to the IRS are e-filed.
In return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank account.
However, what about safety? And can electronic filing actually give you access to all the forms that you might need if 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 may be the best filing option for your requirements.
If you’re thinking about e-filing, some of the advantages include:
- Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission. For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived .
Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund. With e-filing, you’ll receive your money in three weeks or less. Choosing direct deposit can also speed up the refund procedure.
Reduced chance of mistakes: According to 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 returns.
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 necessary, as long as you pay by the April 15 filing deadline. And you’re able to schedule electronic funds 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 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 following the filing due date (typically April 15) will lead to penalties and interest.
Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax documents. If something happens to your paperwork, then you’ll have an electronic backup.
The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.
You have four choices for filing an electronically filed tax return to the IRS.
Employing online tax prep software is far and away the favored approach of most taxpayers. In fact, the IRS says it expected more than four tax returns to be filed through tax return prep program.
Is e-filing really secure?
While e-filing is suitable, you could worry about security — particularly with all these data breaches. But experts agree this isn’t a problem that should dissuade you from e-filing.
“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, 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 mail.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe. “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s important to use a trustworthy service that will help you file your taxes. Chow advises to not e-file on a computer or use an internet connection which is not private.
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 choices. Just make certain that you use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.