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

Is e-filing really 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.

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

If you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can electronic filing really give you access to all the forms that you may need in case you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might 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 are obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

  3. Reduced chance of mistakes: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

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

The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.

    1. Utilize 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’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with these forms. 
    3. Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and some providers cater to specific demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this alternative 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 expected over four tax returns to be filed through tax return prep program.

Is e-filing really secure?

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

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

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

It’s very important to use a trusted service that will assist you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that isn’t private.

Bottom line

For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure to use tax planning software from a trusted source, so you may make certain the information which you supply to transmit to the IRS will be kept protected.