Creative Planning Tony Robbins – Is It Best To E-File My Taxes?

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

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

The majority of individual income tax returns submitted to the IRS are e-filed. 

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

But what about security?  And can electronic filing really give you access to all the forms you might need in case 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 very best filing choice for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    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’ll receive your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.

  3. Simple payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay by 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, as long as the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents.  If something happens to your paperwork, then you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.

The way to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.  The types do the math for you and offer standard advice.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These options are a simple way to complete and e-file your own forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, and a few providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

      Using online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you could be worried about security — especially with so many data breaches.  But experts agree that this is not a problem that should dissuade you by 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, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”

      Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

      It is important to use a trusted service that will assist you record your taxes.  Chow advises not to e-file on a public computer or use an internet connection which is not confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain that you use tax planning software from a dependable source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.