Warren Buffett Buying Gold – Should I E-file My Taxes Online

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

Americans and the IRS may not agree about everything, but they are 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. 

If you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.

But what about security?  And can digital filing actually give you access to all of the forms that you may need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  3. 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 information on problems discovered on e-filed returns compared with paper yields.

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can 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 option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

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

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

  • Use an online tax preparation tax or service software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   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 can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some services appeal 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 record of authorized providers, but be aware this option is likely to be the most costly one. 

    Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about safety — particularly with all these data breaches.  But experts agree that this is not a problem that should deter you by e-filing.

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

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file 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 dependable source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept secure.