Suze Orman Audible – Is It Best To E-File My Taxes?

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

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

The majority of 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 conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.

But what about security?  And can electronic filing really give you access to all the forms that you may need if you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm 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 . 

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced chance of mistakes: 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 info on problems discovered on e-filed returns compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, 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 Direct pay service from your checking or savings accounts, filing 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 result in interest and penalties.

  4. Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents.  If something happens to your paperwork, you’ll have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.

You have four choices for filing 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.  The types do the math for you and provide standard advice.  You can simply do your federal return with these kinds. 
    2. Use an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and some services appeal to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should 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 anticipated over four tax returns to be filed through tax return prep program.

      Is e-filing really stable?

      While e-filing is convenient, you could be worried about security — particularly with so many data breaches.  But experts agree that this is not an issue that should deter you by e-filing.

      “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the email.”

      Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

      It’s very important to employ a trusted service that will help you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection which isn’t confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a yield 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 to use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept protected.