Robert Kiyosaki Cashflow Quadrant – Should I E-file My Taxes Online

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

Americans and the IRS might not agree on everything, but they are 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.  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 save the IRS money because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing really provide you access to all the forms you may need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it may be the very 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 was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  4. Simple 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 afterwards if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic money 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax documents.  So if something happens to your paperwork, then you will 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 easy.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice.  You can only do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and a few services cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one. 

Using online tax prep 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 submitted through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you could worry about safety — especially with so many data breaches.  But experts agree this is not a problem which should dissuade you from e-filing.

“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe.  “Trainers normally use IRS particular APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted links “

It’s very important to employ a trustworthy service that will help you file your taxes.  Chow advises to not e-file on a public computer or use an internet connection that is not private.

Bottom line

For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.