Suze Orman’s Financial Solutions – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the exact same page when it comes to e-filing individual income tax returns.

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

If you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you can get any refund you are owed quicker, especially if you have it directly deposited to your bank account.

However, what about security?  And can electronic filing really provide you access to all of the forms you may 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 whether it might be the best filing option for your requirements.

If you’re Considering e-filing, a Few of the advantages include:

  1. Quick confirmation your forms are obtained: 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 . 
  2. Timely refunds: When you publish a paper filing, it can 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 can also accelerate the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.

  4. Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Direct pay service from the 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 data: Submitting returns electronically implies there is an electronic backup 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 easy.

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

  • Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can simply do your federal return with these forms. 
  • Use an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and a few providers appeal to specific demographic groups.  The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about safety — particularly with so many data breaches.  But experts agree that this is not an issue which should dissuade you by e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain to use tax preparation software from a dependable source, so that you can make certain the information which you supply to transmit to the IRS will be kept protected.