Ramsey David – Is It Best To E-File My Taxes?

Is e-filing a much better way to file 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 submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS cash because its workers don’t have to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.

  3. Easy payment process: 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 needed, provided that you pay from the April 15 filing deadline.  And you’re able to 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. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax documents.  If something happens to your paperwork, you will have an electronic 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 options 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. 
    2. Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with all these kinds. 
    3. Use an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and finances to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and some services appeal to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized 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 preparation software is far and away the preferred approach of most taxpayers.  Actually, 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 could worry about safety — particularly with so many data breaches.  But experts agree this isn’t an issue that should deter you from 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 fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”

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

It’s important to use a trustworthy service to 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 makes sense 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 effortless payment choices.  Just be sure that you use tax preparation 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.