Warren Buffett Company – Should I E-file 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 the same page when it comes to e-filing individual income tax returns.

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

When you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. In return, you could get any refund you are owed faster, particularly in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing really give you access to all of the forms you might need in case you have a complex tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms are 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 your forms have arrived safely. 
  2. 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 may also accelerate the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  4. Easy 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 necessary, as long as you pay by the April 15 filing deadline.  And you can schedule electronic money 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 Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

  • Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with these forms. 
  • Use an internet 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 own forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on earnings, and some services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • 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 database 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you could worry about security — especially with all these data breaches.  But experts agree this is not an issue which should dissuade you from e-filing.

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

    Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links “

    It is important to use a trusted service that will help you record your taxes.  Chow advises not to e-file on a public computer or use an internet connection which is not 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 effortless payment options.  Just make certain to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS will be kept secure.