Books To Read By Warren Buffett – What to Consider When Filing 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.

The majority of individual income tax returns filed to the IRS are e-filed. 

If you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. And in return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.

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

If you’re thinking about e-filing, a Few of the advantages include:

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of errors: According to the IRS, there’s around 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 yields.

  3. Simple payment process: If you owe the IRS money, it is easier to pay at your convenience when you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.

  4. Digital storage of tax data: Submitting returns electronically implies there is an electronic backup of your tax documents.  So 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 so is simple.

How to e-file a tax return?

You have four options for filing 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 have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance.  You can simply do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on income, and a few providers appeal to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this alternative 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 expected over four tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you may be worried about safety — especially with so many data breaches.  But experts agree that this is not a problem that should deter you from e-filing.

“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “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 information in the mail.”

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

It is important to use a trusted service to assist you record your taxes.  Chow advises not to e-file on a public computer or use an online connection which isn’t private.

Bottom line

For many taxpayers, it is sensible to e-file a return because 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 sure to use tax preparation software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept secure.