Warren Buffett Favorite Books – Should I E-file My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely on precisely 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.  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 conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you could get any refund you’re owed faster, particularly if you have it directly deposited into your bank accounts.

But what about safety?  And can electronic filing actually give you access to all of 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’s look at the benefits of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight months to be given 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.

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

  3. Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience 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.  And you’re able to schedule electronic money 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 choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

  4. Digital storage of taxation information: Submitting returns electronically means there’s an electronic backup of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

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

  • Free File Fillable Types — If your income is over $72,000 and you’re 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 simply do your federal return with all these forms. 
  • Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help 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 helping filers who are 60 and older.  The IRS maintains a record of licensed 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 expected over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you may be worried about security — especially with all these data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

    “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”

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

    It’s important to employ a trustworthy service that will assist you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which isn’t confidential.

    Bottom line

    For most taxpayers, it is sensible to e-file a yield 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 be certain that you use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS is going to be kept protected.