Becoming Warren Buffett – Should I E-file My Taxes Online

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

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

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

And in return, you can get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.

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

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

  1. Quick affirmation your forms are 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 months to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  2. 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 information on problems discovered on e-filed yields compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay from 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 option to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.

  4. Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax documents.  So 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 simple.

The way to e-file a tax return?

    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. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
    3. Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some applications suppliers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and some providers appeal to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you could worry about security — particularly with so many data breaches.  But experts agree that this isn’t an issue that should dissuade you by e-filing.

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

Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that need ab sessions,” Chow says.  “All this can be routed over TLS encrypted links .”

It is very important to use a trusted service that will help you record your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which is not confidential.

Bottom line

For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax preparation software from a dependable source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.