Dale Carnegie Video Training – Should I E-file My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re mostly on 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. 

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 are owed faster, particularly in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing actually 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 us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

  4. 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 later if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, 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 penalties and interest.

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

The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.

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

The forms do the math for you and provide standard advice.  You can only do your federal return with all these forms. 

  • Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and some providers appeal to specific demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

    Employing online tax preparation software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about security — particularly 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 revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

    Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

    It is important to employ a trusted service to assist you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that isn’t private.

    Bottom line

    For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit 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 you can make certain the information which you provide to transmit to the IRS is going to be kept secure.