Suze Orman Make Your Money Last – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they’re mostly 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. 

If you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. In return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

But what about security?  And can digital filing actually give you access to all the forms that you might need if you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it may be the best filing option for your needs.

If you’re thinking about e-filing, a Few of the advantages include:

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced chance of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by 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.  Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax records.  If something happens to your paperwork, you’ll have an electronic backup.

The good news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.

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

The forms do the math for you and offer basic guidance.  You can simply do your federal return with these kinds. 

  • Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some providers cater 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 preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about safety — especially with all these data breaches.  But experts agree this isn’t an issue which should dissuade you by e-filing.

    “In fact, it can 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, explains that the IRS has put safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that need token sessions,” Chow says.  “All of this can be routed over TLS encrypted links .”

    It’s very important to use a trusted service to assist you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection that isn’t private.

    Bottom line

    For many taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS is going to be kept protected.