Warren Buffett Diet Coke – 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 are mostly on precisely the exact 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 because it’s a win-win for taxpayers and the IRS.

And in return, you can find any refund you are owed faster, especially if you have it directly deposited into your bank accounts.

But what about security?  And can digital filing actually give you access to all the forms that you might need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.

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

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within one day of digital 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 can take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund process.

  2. Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

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

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

How to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.  The forms do the math for you and provide basic guidance.  You can only do your federal return with all these kinds. 
    2. Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few providers cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very likely to be the most costly one. 

Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than 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 that this is not a problem which should deter you by e-filing.

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

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

It’s very important to use a trustworthy service to help you record your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that is not confidential.

Bottom line

For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make sure that you use tax planning software from a trusted source, so you can make certain the information you provide to transmit to the IRS will be kept secure.