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

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

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

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

When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you can get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really provide you access to all of the forms you may need in case you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it might be the very best filing option for your needs.

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

  1. Quick confirmation your forms are received: The IRS will confirm 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 publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% 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 yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience if 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.  You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

The forms do the math for you and provide standard advice.  You can simply do your federal return with all these forms. 

  • Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and some services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

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

    Is e-filing really stable?

    While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree this isn’t a problem which should deter you by e-filing.

    “In actuality, it may 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 data security at SCIS Security, explains the IRS has put security 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 connections”

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

    Bottom line

    For most taxpayers, it makes sense to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure to use tax preparation software from a trusted source, so you may ensure the information which you provide to transmit to the IRS is going to be kept secure.