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

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

Americans and the IRS may not agree about everything, but they’re largely 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 because it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.

However, what about safety?  And can digital filing really provide you access to all the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the best filing option for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 

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

  2. Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, 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 process: If you owe the IRS money, it is easier to pay at your advantage when 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 option to pay your balance by using the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically implies there’s an electronic copy of your tax records.  So 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 benefits — and the process of doing this is simple.

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
  • Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on earnings, and a few providers cater to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

    Using online tax preparation 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 submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may worry about security — particularly with so many data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

    “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set security measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

    It is important to use a trustworthy service that will help you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection that is not confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a return because it is 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 planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept protected.