Tony Robbins Money Book – 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 on 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 filed to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you can get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing really provide you access to all of the forms that you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and if it may be the best filing choice for your needs.

If you are thinking about 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 digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive 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 procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate 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 process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically implies there is an electronic backup of your tax documents.  So if something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

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

    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.  The forms do the math for you and provide basic advice.  You can simply do your federal return with all these kinds. 
    2. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and a few providers cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database 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 favored approach of most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

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

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

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

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

Bottom line

For most taxpayers, it is sensible 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 make certain that you use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS will be kept secure.