How Did Warren Buffett Start His Business – What to Consider When Filing My Taxes Online

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

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

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

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

  1. Quick affirmation your forms are received: The IRS will confirm 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. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

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

  4. Simple payment process: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically means there’s an electronic copy of your tax documents.  If something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

You have four options for submitting an electronically filed tax return to the IRS.

    1. Use 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.  The types do the math for you and offer basic guidance.  You can only do your federal return with all these kinds. 
    2. Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to steer you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and some services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one. 

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

Is e-filing really secure?

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

“In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your data in the email.”

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

It is very important to employ a trustworthy service that will assist you file your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not private.

Bottom line

For many 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 that you use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS is going to be kept secure.