Bank Stocks Warren Buffett Owns – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they’re mostly on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

In return, you could get any refund you are owed faster, particularly if you have it directly deposited into your bank account.

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

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day 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 receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  3. Easy 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 afterwards if needed, provided that you pay by the April 15 filing deadline.  And you can schedule electronic money transfers to 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 choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically implies there’s a digital copy of your tax records.  If something happens to your paperwork, you will have an electronic backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is easy.

How to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with all these forms. 
    3. Use an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields 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 very likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree this is not a problem that should deter you from e-filing.

“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”

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

It’s important to use a trustworthy service to help you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.

Bottom line

For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax planning software from a trusted source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.