Richard Branson Throws Water On Mark Cuban – Should I E-file My Taxes Online

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 precisely the same page when it comes to e-filing individual income tax returns.

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

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

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’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms are 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 publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  4. Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as you pay by 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, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is simple.

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 forms do the math for you and provide standard advice.  You can simply do your federal return with all these forms. 
    2. Use an online tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and a few services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you could worry about safety — particularly with all these data breaches.  But experts agree this isn’t a problem which should dissuade you by e-filing.

“In fact, 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 set security measures in place to keep your data secure.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

It is important to employ a trustworthy service that will help you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which is not confidential.

Bottom line

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