Suze Orman Show Cnbc – 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 about everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

And in return, you could get any refund you are owed faster, especially in the event that 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 you might need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm 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 . 

    Timely refunds: When you submit a paper filing, it may 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 may also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: According to the IRS, there is around a 1% 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 yields.

  3. Simple payment process: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file.  You can 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 Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

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

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can only do your federal return with these kinds. 
  • Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are a simple way to finish and e-file your forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is very 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 filed through tax return prep program.

    Is e-filing really secure?

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

    “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that require 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 file your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax planning software from a dependable source, so that you can ensure the information which you provide to transmit to the IRS will be kept secure.