As you may have noticed, almost everything is being done online now so a decision needs to be made whether you E-file vs standard paper tax filing. From shopping to researching, communicating to anyone in the world – everything is going through the world wide web. Now, even filing your taxes can also be done online through the E-file system!
We all know that the main idea behind doing things online or electronically is the accessibility and the convenience it brings to us. However, it also brings security risks if not done properly. If we are to apply this thought with filing income taxes, it means critical information is being made potentially public so we need to take steps to make sure the process is secure. E-file systems brings convenience as the entire process is faster than paper filing which means you will save precious time. When E-file returns are processed with secure services (like tax professional use), it can also provide that security you need. It saves you time with the entire process including obtaining the refund (if applicable) faster compared to manually paper filing. Since you will be entering the information online, it means less errors since the e-file system checks your information with its database. In terms of security, although some might feel that doing processes online is unsecure, for tax filing it is the other way around if done correctly. More risk in terms of security is involved with the manual process as the papers or documents you mail the IRS can get lost in the mail and your personal information can be seen by anyone.
E-file vs Standard Paper Tax Filing
Another benefit of E-file is that you get to know if IRS the has received the income tax return as you will get a confirmation of both receipt of filing and the start of processing. If IRS has not accepted the return you filed, then you will be notified within 24 hours with instructions on how to correct the return so you can redo and refile your return. Last but not the least benefit to E-file is that it is environmentally-friendly – since it avoids all the paper involved with a paper filed return.
If you are now convinced and ready to E-file, you just need to take note of certain limitations to the current process. Unfortunately, not everyone can E-file their tax returns. If you fall into certain categories, you will still have to file via a paper return. For instance, you will need to file your taxes by paper when someone else incorrectly took a dependent exemption that should have been on your tax return, so the IRS can address the issue.
To know more about the limitations of E-file, you can check the IRS website. Once you have validated that you can proceed with the E-file system, you need to make sure that your taxes are organized and done by a tax professional. You can also prepare them by yourself if you have the knowledge and time. In reality, there’s no right or wrong answer to which mode of filing is the best, but E-filing is the method of the future. However, it use will all depend on your preference and tax situation you are facing.