Suze Orman’s Protection Portfolio – Is It Best To E-File My Taxes?

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular because it is 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 have to spend time manually processing your return. In return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

But what about security?  And can digital filing really provide you access to all the forms that you might need in case you have 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 needs.

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

  1. Quick confirmation your forms have been 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 that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around 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 yields compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you can schedule electronic money 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 using the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, 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 taxation information: Submitting returns electronically implies there’s an electronic copy of your tax documents.  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 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 have the ability to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can simply do your federal return with all these forms. 
    2. Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you may worry about security — particularly with all these data breaches.  But experts agree that this is not a problem that should deter you from e-filing.

“In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

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

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

Bottom line

For most taxpayers, it is sensible to e-file a yield 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 that you use tax planning software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept secure.