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

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

Americans and the IRS might not agree on everything, but they are mostly on precisely the 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 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 employees do not need to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.

But what about security?  And can electronic filing actually provide you access to all the forms that you might need in case you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.

If you are thinking about e-filing, a Few 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 electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors 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’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 from the April 15 filing deadline.  You also have the option to pay your balance by making use of 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 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 decide to e-file and get those benefits — and the practice of doing this is easy.

    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 are 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 offer standard guidance.  You can only do your federal return with these kinds. 
    3. Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to guide 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 yields.  But eligibility for free help is normally restricted based on income, and a few providers appeal to specific 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, 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 be aware this alternative is very likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, 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 suitable, you could be worried about security — especially with all these data breaches.  But experts agree that this is not an issue which should dissuade you by e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal 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 set safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

      It’s very important to employ a trustworthy service to assist you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection that isn’t confidential.

      Bottom line

      For many taxpayers, it makes sense to e-file a yield 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 sure that you use tax preparation software from a dependable source, so you can make certain the information which you supply to transmit to the IRS will be kept secure.