Does Warren Buffett Have Kids – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely 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.

And in return, you can get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    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 receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

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

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct 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 after the filing due date (typically April 15) can lead to penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents.  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 easy.

  • 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 standard advice.  You can only do your federal return with these forms. 
  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some applications providers 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.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and a few providers appeal to particular demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 
  • Using online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected more than four in five 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 security — especially with all these data breaches.  But experts agree that this isn’t a problem which should dissuade you by e-filing.

    “In fact, 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, clarifies that the IRS has put 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 links “

    It is important to use a trusted service that will help you file your taxes.  Chow advises not to e-file on a computer or use an internet connection that is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a return because 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 certain to use tax planning software from a trusted source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.