Suze Orman’s Protection Portfolio Gold Edition – 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’re mostly on precisely the exact 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 popular as it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing actually give you access to all of the forms you might need in case you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. 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’ll get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  4. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily 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 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 lead to penalties and interest.

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

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.

You have four choices for filing an electronically filed tax return to the IRS.

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can only do your federal return with all these forms. 
  • Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your 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.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on income, and a few services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed 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 more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about security — especially with all these data breaches.  But experts agree this isn’t an issue which should dissuade 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 direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a return since 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 that you use tax planning software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS will be kept secure.