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

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

Americans and the IRS may not agree on everything, but they are 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 is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly if you have it directly deposited into your bank account.

However, what about security?  And can digital filing really provide you access to all of the forms 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 might be the very best filing choice for your requirements.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment 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 get your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info 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 convenience if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from the checking 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 result in penalties and interest.

  4. Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax records.  So if something happens to your paperwork, then 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 so is simple.

How to e-file a tax return?

The forms do the math for you and provide basic guidance.  You can only do your federal return with all these kinds. 

  • Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and some providers appeal to specific demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you could be worried about security — especially with so many data breaches.  But experts agree this is not an issue which should dissuade you from e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing 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 rather than exposing your information in the email.”

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

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

    Bottom line

    For most 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 be sure that you use tax planning software from a dependable source, so you can ensure the information which you supply to transmit to the IRS is going to be kept secure.