Warren Buffett Commencement Speech – What to Consider When Filing My Taxes Online

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

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

The majority of individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. In return, you could find any refund you are owed faster, especially if you have it directly deposited into your bank account.

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

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

  1. Quick confirmation 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 does not send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can 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 process.

  2. Reduced chance of errors: According to the IRS, there’s around 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 problems discovered on e-filed returns compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, 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’s an electronic backup of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is easy.

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice.  You can simply do your federal return with these forms. 
  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on income, and a few providers appeal to specific demographic groups.  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 the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about safety — particularly with so many data breaches.  But experts agree that this is not a problem that should deter you from e-filing.

    “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”

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

    It’s important to use a trustworthy service that will help you record your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which isn’t confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a yield since 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 sure that you use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept secure.