America’s Money Class With Suze Orman – Is It Best To E-File My Taxes?

Is e-filing a much better way to file your taxes? 

Americans and the IRS may not agree about everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing really give you access to all the forms you might need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it might be the best filing choice for your requirements.

If you’re Considering e-filing, some of the advantages include:

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation data: Submitting returns electronically implies there is a digital 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 find those advantages — and the process of doing this is simple.

You have four choices for filing an electronically filed tax return to the IRS.

The forms do the math for you and offer basic guidance.  You can only do your federal return with all these forms. 

  • Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are an easy way to finish and e-file your forms.  Some applications suppliers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and some services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one. 

    Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may worry about security — especially with all these data breaches.  But experts agree that this isn’t an issue which should dissuade you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”

    Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe.  “Trainers normally use IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted links “

    It is very important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection which is not confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be sure that you use tax planning software from a trusted source, so that you may make certain the information you supply to transmit to the IRS is going to be kept protected.