Warren Buffett Cash Quote – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

In return, you can find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.

However, what about security?  And can digital filing actually give you access to all of the forms that you might need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of mistakes: In accordance with the IRS, there’s approximately 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 yields.

  3. Simple payment process: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily 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 your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is simple.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and offer standard guidance.  You can simply do your federal return with all these kinds. 
    2. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
    3. Get complimentary, 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 a few providers appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one. 

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

Is e-filing really stable?

While e-filing is convenient, you could worry about security — especially with all these data breaches.  But experts agree this isn’t a problem which should deter you from e-filing.

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

Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data 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 very important to employ a trusted service that will assist you file your taxes.  Chow advises to not e-file on a computer or use an internet connection that is not confidential.

Bottom line

For most taxpayers, it makes sense 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 choices.  Just make certain that you use tax planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.