Ben Stein Spruce House – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

And in return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.

However, what about security?  And can digital filing really give you access to all of the forms that you may need if you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing option for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of mistakes: In accordance with the IRS, there’s approximately 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 yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money 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 making use of the IRS Direct pay service from your checking account or savings account, filing 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 interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records.  So if something happens to your paperwork, then you’ll have an electronic backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is easy.

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can only do your federal return with these kinds. 
    2. Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and a few services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

      Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you may worry about safety — particularly with so many data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

      “E-filing a tax return has turned out 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 can 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, clarifies that the IRS has set security measures in place to keep your data secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

      It’s very important to employ a trustworthy service that will assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain to use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept secure.