Suze Orman The Ultimate Retirement Guide – 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 are mostly on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

In return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.

However, what about safety?  And can digital 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 benefits of e-filing, and if it might be the very best filing choice for your needs.

If you’re Considering 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 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is around 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 issues discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if 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 your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

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

How to e-file a tax return?

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

  • Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
  • Get free, in-person tax aid: 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 some providers appeal to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one. 
  • Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”

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

    It is very important to employ a trustworthy service to assist you record your taxes.  Chow advises not to e-file on a computer or utilize an online connection which isn’t confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield since it is 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 trusted source, so you may make certain the information which you provide to transmit to the IRS is going to be kept secure.