Warren Buffett Gujarati Book – 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 on everything, but they’re largely on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed. 

And in return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing actually provide you access to all the forms you may need in case you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing option for your requirements.

If you’re Considering e-filing, a Few of the advantages include:

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, as long as 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, 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) can lead to interest and penalties.

  4. Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, you will have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing this is simple.

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
  • Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some applications suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to steer 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.  However, eligibility for free help is typically limited based on income, and a few providers cater to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are 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. 

    Using online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected 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 security — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter 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 data in the email.”

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

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

    Bottom line

    For many 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 effortless payment choices.  Just be certain to use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS is going to be kept secure.