Richard Branson Shark Tank Episode – Should I E-file My Taxes Online

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

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

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

When you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you could get any refund you are owed quicker, especially if you have it directly deposited into your bank account.

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

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, 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.

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file.  It’s possible to 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

    1. Utilize 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 forms do the math for you and provide basic advice.  You can simply do your federal return with all these forms. 
    2. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The program 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 aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and some services appeal to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is 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 over four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you may be worried about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue which 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 leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

Dennis Chow, vice president of information 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 token sessions,” Chow says.  “All this is routed over TLS encrypted connections”

It’s very important to use a trusted service that will help you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection which is not confidential.

Bottom line

For many taxpayers, it makes sense to e-file a yield 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 make sure that you use tax preparation 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 protected.