The Essays Of Warren Buffett Lessons For Investors And Managers – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on 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. 

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

But what about safety?  And can digital filing really provide you access to all the forms you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.

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

  1. Quick confirmation your forms are obtained: 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 . 

    Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced chance of mistakes: According to the IRS, there is approximately a 1 percent 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 returns.

  3. Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  And you’re able to 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. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax records.  So if something happens to your paperwork, you’ll have a digital backup.

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

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

  • Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and some services appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • 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 be aware this alternative is very likely to be the most costly one. 
  • Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected 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 be worried about safety — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter you by e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that need ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

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

    Bottom line

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