Berkshire Hathaway Warren Buffett Letter – Should I E-file My Taxes Online

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

Americans and the IRS may not agree about 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 conserve the IRS cash because its workers don’t need to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing really give you access to all the forms that you may need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing option for your requirements.

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. 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 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

  3. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, 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 yields.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Immediate 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 after the filing due date (typically April 15) will result in penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically means there is a digital backup of your tax records.  If something happens to your paperwork, then you’ll have a digital backup.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance.  You can only do your federal return with all these forms. 
    3. Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and finances to steer you through the completion of your forms.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on income, and a few providers cater to specific demographic groups.  The IRS maintains a record of licensed providers, but be aware this option is likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — particularly with so many data breaches.  But experts agree that this isn’t a problem which should deter you from e-filing.

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

Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information secure.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted connections.”

It’s very important to employ a trustworthy service that will assist you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection that isn’t confidential.

Bottom line

For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain that you use tax preparation software from a trusted source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.