Suze Orman Financial Security Now – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they are mostly on 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 popular because it’s a win-win for taxpayers and the IRS.

In return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can electronic filing actually give you access to all the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s 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, a Few of the advantages include:

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

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

  2. Reduced likelihood of errors: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, you will have a digital backup.

The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can simply do your federal return with all these forms. 
    2. Use an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you may worry about safety — especially with all these data breaches.  But experts agree this isn’t a problem 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,” 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 network as opposed to exposing your data in the email.”

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

It is important to employ a trusted service to assist you record your taxes.  Chow advises to not e-file on a public computer or utilize an internet connection that isn’t private.

Bottom line

For many taxpayers, it is sensible to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain to use tax preparation software from a trusted source, so that you can ensure the information you provide to transmit to the IRS is going to be kept secure.