Warren Buffett Annual Report 2016 – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are largely 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 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 do not need to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.

But what about security?  And can electronic filing really give you access to all the forms that you may need if you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund process.

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

  4. Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking 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 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 this is easy.

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

The types do the math for you and provide basic guidance.  You can simply do your federal return with these kinds. 

  • Use an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and a few services cater to specific demographic groups.  By way of example, 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 be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree that this is not an issue that should deter you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain that you use tax preparation software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept secure.