Stephen Covey Emotional Bank Account – Should I E-file My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

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

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

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  3. Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the 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 following the filing due date (typically April 15) will lead to penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax records.  If something happens to your paperwork, then you will have a digital backup.

The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is simple.

You have four choices for submitting an electronically filed tax return to the IRS.

    1. Use 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. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can simply do your federal return with all these kinds. 
    3. Use an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on income, and a few providers appeal to particular demographic groups.  The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one. 

Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree that this isn’t an issue which should deter you by 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 may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

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

It’s very important to employ a trustworthy service to help you record your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which is not private.

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 easy payment options.  Just be certain to use tax preparation software from a trusted source, so you may ensure the information which you supply to transmit to the IRS will be kept secure.