Warren Buffett Book Reading Habit – 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 about everything, but they’re mostly on precisely the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular because 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 workers don’t need to spend time manually processing your return. In return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited into your bank account.

But what about safety?  And can electronic filing actually provide you access to all the forms you may need in case you have a complex 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 choice for your needs.

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

  1. Quick confirmation 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 doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also accelerate the refund process.

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

  4. 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, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation data: Submitting returns electronically means there is a digital copy of your tax documents.  So if something happens to your paperwork, you will have a digital backup.

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

The forms do the math for you and provide basic advice.  You can only do your federal return with these forms. 

  • Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and some providers cater to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

    Using online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree this isn’t a problem that should deter 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, clarifies the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

    It is important to employ a trusted service to help you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection that is not private.

    Bottom line

    For most taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain to use tax planning software from a trusted source, so you may ensure the information you provide to transmit to the IRS will be kept secure.