Is It Safe to E-File Your Tax Return?

E-File Is a Fast and Secure Way to Submit Your Tax Returns

A woman preparing tax return sitting at a desk with a laptop and calculator.
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E-filing is an electronic method of submitting your income tax return to the Internal Revenue Service (IRS) using the internet or another type of direct connection. When you e-file your taxes, you don't need to deal with paper forms, envelope stuffing, or postage to file your return. You electronically transmit your sensitive personal financial and tax data directly to the IRS.

You may also electronically transmit your credit card or bank account numbers. The IRS uses your bank account information to transfer a refund directly to your account. The credit card information can be used for remitting payment for taxes due.

Is E-File Safe When Submitting Your Tax Returns?

The short answer is yes, e-filing is very safe for submitting your tax returns. The chances are extremely remote that your income tax data could be stolen while you e-file. It's more secure than mailing a tax return via snail mail because the data in an e-filed tax return is specially encrypted for extra security. Encryption prevents any access to data as it moves between your tax software and the IRS or state tax agency.

You should still be cautious, however, because scammers may be looking to steal your information through phishing and may try to file fraudulent returns. There is also a chance, however remote, of a data breach at a commercial tax preparer. Always take precautions in protecting your sensitive information and monitor your credit reports for unusual activity and freeze your credit if necessary.

Tax Software and Tax Preparers

If you still have concerns about e-filing your tax return, visit the website of the tax software you want to use and read its privacy policy. Search the support pages to find details on the technology the company uses for e-filing.

The tax software site should guarantee that it uses the most secure technology available, typically a form of encryption. If you are considering filing a state tax return electronically, be sure the tax software information includes the same security for state tax agencies. Most of the popular tax software applications have encryption and securely transmit your data.

If you decide to hire someone to prepare and e-file your taxes, make sure they have the necessary IRS authorization to transmit the information of other people. Independent tax services must recertify and pass testing each year. The IRS maintains a list of current authorized IRS e-file providers. You may search this list by zip code and by state.

You should also understand that individual tax preparers may charge an additional fee for filing if you have multiple forms or schedules.

Numerous Benefits of E-Filing

E-filing is more than a way of embracing technology and saving a few sheets of paper or a few cents on postage. Aside from providing a safe and secure transfer of your data to the IRS and your state's taxing authority, it offers several other benefits for you.

Easy and Accurate Calculations

When you e-file, you'll enter your tax information into online software that does the math for you. It also walks you through the process of completing your return in a straightforward manner, and you can save your work to finish it later if needed.

Many tax software packages also ask a series of questions designed to walk you through possible tax credits and deductions. These interviews are helpful in securing you the largest return possible or, if you owe, reducing the amount of taxes due.

Works on Your Schedule

E-filed returns can be filed at any time of day or night. If you haven't gotten around to doing your taxes until the last minute, you can do them late at night or in the early morning hours. You can also have your tax preparer send your return via e-file to submit your tax return information as soon as the work is finished.

Get a Faster Refund

You'll often receive your refund faster than if you'd used regular mail. To speed up your return, you can choose to have your funds sent to one, two, or bank accounts via automatic deposit.

Use the IRS Website at No Charge

In most cases, you can file your federal return at no charge by using IRS Free File on the IRS.gov website. If you make under $69,000, you can use software; if you make more than that, you can use Fillable Forms. The IRS also offers programs for volunteer tax assistance and tax counseling for low-income and elderly taxpayers, which includes free tax preparation assistance and free e-filing.

Several Payment Options

If you owe money for your taxes, you can e-file at any point up to the April filing deadline and set up an automatic payment plan with the IRS for no or low cost. You can also pay your taxes with a debit or credit card for a small fee, or explore other payment options listed on IRS.gov's payment options page.

Won't Get Lost in the Mail

Your tax return can get lost in the mail, but an e-filed return doesn't have that problem. File electronically, and you get quick confirmation that your tax return has been submitted successfully, as well as confirmation when the IRS has accepted it.

Know When Your Refund Will Be Deposited

Your tax software can usually tell you when your refund is being processed and when to expect your refund to be deposited.

No Number Errors

Prepare your tax return on paper, and you may make an error in calculations or when transferring numbers to your tax forms. Income tax software is required to offer the option to e-file, and the software will do all the tax calculations, even double-checking the numbers prior to submitting the return and guaranteeing accuracy.

E-Filed Returns Do Not Pass Through Human Hands

When sent by mail, someone at the IRS has to enter or scan your tax information into their system. Keying errors and technical problems can interfere with getting your taxes filed correctly. When you e-file, your data goes directly into the IRS systems, bypassing the chance for human error.

A Federal Focus on E-File

Starting in 2011 with forms for tax year 2010, the IRS stopped mailing paper tax packages to taxpayers, recommending they find the forms they need on the internet, through Taxpayer Assistance Centers, in their communities, or by phone.

Article Sources

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  4. IRS.gov. "Get Your Refund Faster: Tell IRS to Direct Deposit your Refund to One, Two, or Three Accounts." Accessed March 19, 2020.

  5. IRS.gov. "Free File: Do Your Federal Taxes for Free." Accessed March 19, 2020.

  6. IRS.gov. "Apply Online for a Payment Plan." Accessed March 19, 2020.

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