Warren Buffett House Tour – What to Consider When Filing My Taxes Online

Is e-filing really a better way to record your taxes? 

Americans and the IRS might not agree about everything, but they are largely on the same page when it comes to e-filing individual income tax returns.

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

If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing really provide you access to all of the forms that you might need if you have 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 might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm 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 publish a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s simpler 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 from the April 15 filing deadline.  And you can schedule electronic funds 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 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 fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.

  4. Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax records.  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 benefits — and the process of doing so is simple.

The way to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The types do the math for you and offer standard advice.  You can only do your federal return with all these kinds. 
    2. Use an online tax preparation tax or service software: Tax prep software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and a few services cater to particular demographic groups. 
    4. 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 record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

Employing online tax prep 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 filed through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree that this isn’t an issue that should deter you from e-filing.

“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the email.”

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

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

Bottom line

For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax preparation software from a trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept protected.