Stephen Covey Time Management Matrix – Should I E-file My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely on precisely the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite as 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 workers do not need to spend time manually processing your return. In return, you can find any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing really give you access to all the forms you might need in case you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: 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 that your forms have arrived . 
  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 receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced chance of errors: According to the IRS, there is approximately a 1 percent 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 returns compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if 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 money transfers to send the IRS what you owe on a date of your choosing — again, provided that 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 the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax records.  If something happens to your paperwork, then you’ll 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 easy.

You have four options for filing an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can only do your federal return with all these kinds. 
    2. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    3. Get complimentary, 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 income, and some services cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very 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 expected more than four in five tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

      “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

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

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax planning software from a trusted source, so you can make certain the information you provide to transmit to the IRS is going to be kept secure.