Warren Buffett Books On Stocks – What to Consider When Filing My Taxes Online

Is e-filing a much better way to record 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.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing really provide you access to all of the forms that you might need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it might be the best filing option for your requirements.

If you are Considering 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 electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    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 receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

  2. Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.

  3. Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from 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. You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

  4. Digital storage of tax information: Submitting returns electronically implies there is a digital backup of your tax documents.  So if something happens to your paperwork, you’ll have an electronic backup.

The good news: Most taxpayers do decide to e-file and get 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 provide basic advice.  You can simply do your federal return with these kinds. 

  • Use an online tax preparation tax or service software: Tax prep software and online filing services are options.  These options are an easy way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on income, and a few providers cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized 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 favored approach of the majority of 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 may worry about safety — especially with so many data breaches.  But experts agree this is not an issue which should deter you from e-filing.

    “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

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

    It is very important to employ a trusted service that will help you record your taxes.  Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.

    Bottom line

    For most taxpayers, it is sensible 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 preparation software from a trusted source, so you can ensure the information you supply to transmit to the IRS is going to be kept protected.