Taxes - any disadvantges to E-file?

[ERD50]

Setting aside the argument that it makes it easier for the feds to automatically audit you - any other negatives?

I've never done it, in some past years I had an odd form or a very long Sched-D (testosterone effect) that it would not accept, so I have no experience. I did my taxes this year with TaxAct on-line, it offers free E-File for fed, and I see my state (IL) offers a free electronic filing from their own web site.


Advantages: Less paper to print. No trip to post office, no stamp/envelope to buy and no concern that it gets lost. Also, it looks like you can set up automatic withdraw/deposit from a bank routing number, so no checks to write or deposit.

Since I do returns for ourselves and each of three kids, the printing/mailing/check writing adds up.

So, any negatives? Do you need to answer 99 questions to get it done, or does it pretty much take the data from your completed forms?

TIA - ERD50

 

[OAG]

I and my grown son (he works for IRS) have used Tax Act for several years -- good program. This is the first year I used E-file and found it pretty simple, quick and FAST. I did have a small refund this year and it took about 6 days to hit the direct deposit (ACH) in the bank account. I also used the state return from TAX ACT (OHIO) -- although I used the state provided e-file system to file as it was much easier to do. I have not found a single drawback to using the e-file system.

BTW the IRS inputs data from paper returns and after that step it is like the return was e-filed. I don't see any advantage to them with e-filed returns that they do not already have with paper returns.

OAG

 

[Fireup2020]

This was my first year I was not able to e-file (have a pending 1040X for '05) and it was frustrating! Printing, mailing - what the heck?! I have becomed so accustomed to doing nearly ALL my financial transactions online. Pros - simple and quick! Cons? Not really sure....

 

[cube_rat]

Just my .02 cents on Tax Act here. I used Turbo Tax for the last several years and recently switched over to Tax Act this year based on the feedback from some of the folks on this site. Tax Act is a great piece of software. You can't beat the price either. We efiled our taxes and promptly got confirmation back from state and federal. I would recommend Tax Act. BTW - I've been efiling for the last 4 years with absolutely no issues with the IRS or California.

 

[ERD50]

Thanks for the quick feedback - I go fix and eat lunch and the answers are all here. This is a great forum!

BTW the IRS inputs data from paper returns and after that step it is like the return was e-filed. I don't see any advantage to them with e-filed returns that they do not already have with paper returns.

OAG

This is what I figured also. But many people do site this as a negative.

Just my .02 cents on Tax Act here. I used Turbo Tax for the last several years and recently switched over to Tax Act this year based on the feedback from some of the folks on this site. Tax Act is a great piece of software.

I got really frustrated with TurboTax last year. Long story, but they had known errors regarding Roth eligibility that they didn't alert their customers to. I spent hours and hours trying to figure out what I was doing wrong. After many more hours searching the TurboTax forum - I found out they *knew* of the error, and had a work-around. But, I had to search for it, and if you did not already know the tax code involved and know what answer to expect, you would have just accepted their answer that you do not qualify. It probably wouldn't even get covered under their warranty - the form you submit is 'correct', it is just that their software directed you away from adding money to a Roth account. So, I was anxious to try the competition.

I'm using the on-line version. Their desktop version is Windows-only. In some ways, it is nice to know that the data is saved every step. I don't really need to worry about backing up as much. I think it is a bit clunky (but so was TurboTax), to me, too many forms require multi-page entries. And, like TurboTax, it is too hard to get to a specific line of a form to update - you need to go through 20 questions sometimes, just to get there. But, overall I am reasonably happy with it.

So, thanks again - I will E-file this year.

-ERD50

 

[SC]

Even though it takes a ream of paper and a trip to the post office, I still send in my taxes on dead trees. I like knowing exactly what information is being sent to the IRS, and with the e-file, I don't know what's being sent. I know it's 99.99% likely that it's the same information. It's just that I've seen more than my fair share of buggy software (not to mention the software that "phones home") that I don't trust it.

Also, after the tax software updates itself, I block it from accessing the internet with ZoneAlarm. That's just to be sure that my financial information isn't sent anywhere without my consent. I'll admit to a little paranoia, but that's not necessarily a bad thing when it comes to financial information and taxes.

 

[Khan]

There are free online tax sites available through the irs.gov page if you meet certain criteria of income/age/state...

 

[TromboneAl]

SC, I kind of feel the same way, but I wonder if the overworked underpaid drone who inputs the numbers from your dead tree scrolls, or the optical scanner that scans your scribbles is MORE likely to make a mistake than the efiling software.

 

[SC]

Al, I've wondered that too. Hopefully such a mistake would be easily corrected, and most importantly, easy to prove it wasn't MY fault.

 

[Peaceful_Warrior]

I used TurboTax originally, then switched to TaxAct Online and took advantage of the free Fed file the first year and then printed out my State and manually sent that in.

Each year after that, I've paid the $15 and submitted e-file and have been very pleased.

To answer your question: I have not found any downsides to e-filing, and by doing so I not only get my return much more quickly, I also save on the paper, stamps, and time from filing manually.

 

[Goonie]

I Tele-Filed about 4 years ago....that was REAL easy.....Then they did away with it! Bummer!

Since then, I've used TurboTax and have eFiled both Fed and State (IL). The Fed through Turbo and the State at the IL Dept of Rev. It has gone flawlessly every time! I got confirmation back within hours, and got my refunds back in about a week to 10 days....direct deposited! I love it!

As I see it...All pros....No cons!
8)

 

[CyclingInvestor]

Also, after the tax software updates itself, I block it from accessing the internet with ZoneAlarm. That's just to be sure that my financial information isn't sent anywhere without my consent. I'll admit to a little paranoia, but that's not necessarily a bad thing when it comes to financial information and taxes.

Thats not paranoia. People without ZoneAlarm (or similar firewall software that monitors
and controls outbound connection attempts) would be surprised at the number of "phone
home" attempts that modern software attempts.

 

[TromboneAl]

I've paid the $15 and submitted e-file and have been very pleased.

Paying $15 is a con. I'd rather print and mail it, and use the $15 for a dungeness crab and a six pack of beer.

 

[JohnEyles]

Paying $15 is a con. I'd rather print and mail it, and use the $15 for a dungeness crab and a six pack of beer.

I agree. It's gotta be more convenient for the IRS. I will do it when it becomes free.

 

[W2R]

Until last year, I always filled in my form by hand, very clearly and carefully.

Last year and this year, I used TurboTax. I e-filed my federal, and used the Louisiana Dept of Revenue's website to fill in my my state tax form and file it online.

When I filled in my form by hand, I was careful and absolutely sure that I had claimed every cent that was due me. If I wasn't sure, I researched any questions.

An advantage of TurboTax is that it took me about 1/10th the time. That's also the disadvantage, because I didn't really think about what I was doing. You don't try to document that what you are doing is actually correct - - you just trust TurboTax to ask the right questions. You kind of give up control with TurboTax, in that sense, and that is not always comfortable.

But then, what's better - - a day off that I would otherwise have spent doing taxes, or maintaining control? I doubt that what I got back was much different either way, and I really enjoyed that day off.

I will continue filing my taxes by e-file, though next year I may try TaxAct after what I have read here about it.

 

[jazz4cash]

I've used turbotax and paper returns several years. last year decided to use the free e-file packaged with TT. it was rejected because IRS records and soc sec name and number did not match. spouse's soc sec still has maiden name (we've only been married 20 yrs). when she went to change it, soc sec would only permit her to modify it to first middle maiden last, so when we re efiled, the names still dont match..........screw that, im back to paper returns.


BTW, you can still get refunds direct deposited with a paper return.

 

[ERD50]

I've used turbotax and paper returns several years. last year decided to use the free e-file packaged with TT. it was rejected because IRS records and soc sec name and number did not match. spouse's soc sec still has maiden name (we've only been married 20 yrs). when she went to change it, soc sec would only permit her to modify it to first middle maiden last, so when we re efiled, the names still dont match..........screw that, im back to paper returns.


BTW, you can still get refunds direct deposited with a paper return.

direct deposit refunds with paper return - yes, I think I actually did that last year - screwed up and let th feds keep some of my money interest freee for 18 months! arghhhh!

Our 1040 paper return was rejected many years ago for my wife's SSN and maidem name thing. So that is not just an electronic thing.

-ERD50

 

[JustCurious]

I have efiled using Turbo Tax Basic edition for the last 4 years, and the only "downside" is that the program costs $20, but I would be willing to pay more because it is so convenient. There are many upsides--the ability to quickly see different scenarios using the software, the software walks you through a list of questions, the filing is quick electronic delivery, no printing, stamps, no trip to the post office, possible mail delay or loss, and no chance of data entry error on the IRS side when they transfer from paper to their system.

I tried TaxAct last year because it was free, but it didn't have the option of printing the return in PDF format, and since I am now paperless (I store all of my financial records in PDF format including bank and brokerage statements), I actually purchased TurboTax Basic and re-entered my information so that I could have a PDF copy of my return saved electronically.

O0

 

[MasterBlaster]

Is anyone (besides myself) concerned with the security aspects of keeping your tax records on your computer that could be hacked by ciber-thieves and to the issues with sending them electronically ?

Is anyone else concerned with what will be done with your tax return besides it being filed for you ? Is your tax return going to be "shared" with anyone else ? Are they going to do some data mining on your return so that you can be targeted for sales pitches ?

Is anyone concerned with inadvertant slips by the software company such that your tax records are disclosed "accidentally" ?

 

[Peaceful_Warrior]

That's odd - I've been able to print my TaxAct e-filings in PDF every year, including the one when it was free.

I have efiled using Turbo Tax Basic edition for the last 4 years, and the only "downside" is that the program costs $20, but I would be willing to pay more because it is so convenient. There are many upsides--the ability to quickly see different scenarios using the software, the software walks you through a list of questions, the filing is quick electronic delivery, no printing, stamps, no trip to the post office, possible mail delay or loss, and no chance of data entry error on the IRS side when they transfer from paper to their system.

I tried TaxAct last year because it was free, but it didn't have the option of printing the return in PDF format, and since I am now paperless (I store all of my financial records in PDF format including bank and brokerage statements), I actually purchased TurboTax Basic and re-entered my information so that I could have a PDF copy of my return saved electronically.

O0

 

[kenepp1]

I've e-filed for the last 7 years and would not want to do it any other way. I e-filed on March 1 and had both fed and state accepted the next day.

Being a Vanguard client, I get to use Turbo Tax, It's Deductible, and e-file fed and state taxes all for free. It's Deductible is a great tool to use if you donate a lot of goods to charity. I have saved a good deal more than when I just estimated it by the bag full. I also had my state tax be auto-deposited into my bank account (I rolled the excess fed payment into next year so I would not have to do the stupid quarterly forms.

 

[ERD50]

I tried TaxAct last year because it was free, but it didn't have the option of printing the return in PDF format,

I just used TaxAct online, and it def gives the option of printing as a pdf. You just right click and 'save as'. The pdf goes to your HD.

On a Mac, you also have the option of creating a pdf of anything that you can print. It is built into the printer dialog box. Very handy - I use it a lot.

I'm pretty sure Windows has a utility that can be added to do the same thing.

-ERD50

 

[Fireup2020]

Master Blaster, do you really feel safe with any information out there? I tracked my birthmother down by using her SSN - which I did not start off with at all. Ran a credit check - to locate her. (Long story - all good in the end - but that is how I tracked her down) The information is out there - and anyone who has the know how can borrrow your identity. The VA lost computer files, hospital records are compromised, etc. I maintain a security alert on my credit file - and purchase items carefully and do not disclose additional numerical information than necessary. I have faith that I am the only one who needs to be me - but I still chose to e-file, bank, and purchase online. There is a leap of faith involved - so be it.

 

[youbet]

I've been using Turbo Tax for a number of years. And I print and mail my returns to the feds and state.

I've been searching for a reason to e-file and can't find one. Printing and mailing takes me less than 30 mins. Even if e-filing would save me half of this time....duh.....who cares?

I don't believe that all the data from my mailed paper returns is keypunched in by fed drones. I think they only pick up key numbers and the rest is left outside their prying eyes unless they have reason to investigate. So, why automate them wanting to know the color of undies you wear when filing?

If the feds want me to e-file so badly, is it not an oxymoron that it can be good for me? Fed desire = youbet advantage? I don't think so.

 

[bbbamI]

We've used Turbo Tax for the last few years and have e-filed. We do not have state taxes...only Fed. Turbo tax used to have a rebate form for the cost of e-filing, but I don't see one with the 2006 software.

We've never had a problem with e-filing. As far as security goes, the mailed forms could get into the wrong hands. The stamp isn't going to buy us much security.