Cnbc Suze Orman Show Podcast – 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 are largely on precisely the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.

But what about security?  And can digital filing actually provide you access to all of the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s 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 yields compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to 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 Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically means there is an electronic copy of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

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

How to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can simply do your federal return with all these kinds. 
    2. Use an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed 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 preferred approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

While e-filing is convenient, you may worry about safety — especially with so many data breaches.  But experts agree this isn’t a problem that should deter you by e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, 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 system as opposed to exposing your information in the email.”

Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links “

It’s very important to employ a trusted service to assist you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which is not private.

Bottom line

For many taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax preparation software from a dependable source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.