Suze Orman Ultimate Retirement Guide Pbs – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the same page in regards to e-filing individual income tax returns.

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

When you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. And in return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.

But what about safety?  And can electronic filing really give you access to all of the forms that you may need if 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 might 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 are received: The IRS will confirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given 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 process.

  2. Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  3. Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting 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) can lead to penalties and interest.

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

The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is simple.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $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 provide basic advice.  You can simply do your federal return with these forms. 
    3. Use an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and some services appeal to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this alternative is likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could be worried about security — particularly with so many data breaches.  But experts agree this is not a problem that should dissuade you from e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”

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

      It’s important to employ a trusted service to assist you record your taxes.  Chow advises not to e-file on a public computer or use an internet connection that is not private.

      Bottom line

      For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure to use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.