Robert Kiyosaki Financial Literacy – 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 submitted to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

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

However, what about safety?  And can digital filing actually give you access to all the forms that you might need in case you’ve got 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 might be the best filing option for your needs.

If you are thinking about 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 one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may 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 earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with all these kinds. 
    3. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and some providers appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very likely to be the most costly one. 

      Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you from e-filing.

      “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”

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

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return because 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 make certain to use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept secure.