Elon Musk Warren Buffett – Should I E-file My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re mostly on precisely 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’s a win-win for taxpayers and the IRS.

And in return, you could find any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

But what about safety?  And can electronic filing really give you access to all of the forms that you may need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the best filing option for your needs.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment 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’ll receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, 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. Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, 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.

  4. Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

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

You have four choices for filing an electronically filed tax return to the IRS.

The types do the math for you and offer standard advice.  You can only do your federal return with these forms. 

  • Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are a simple 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 finances to guide you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and some services cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 
  • Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about safety — especially with so many data breaches.  But experts agree that this isn’t a problem 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 network as opposed to exposing your information in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put security measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says.  “All this can be routed over TLS encrypted links .”

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

    Bottom line

    For most taxpayers, it makes sense 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 make sure to use tax preparation software from a trusted source, so you may make certain the information which you provide to transmit to the IRS is going to be kept secure.