Warren Buffett Ice Cream Cones – What to Consider When Filing My Taxes Online

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

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

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is popular because it is 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 don’t have to spend time manually processing your return. In return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing really provide you access to all of the forms you might need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the very best filing option for your requirements.

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

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

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

  3. Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when 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.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking 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 after the filing due date (typically April 15) can lead to interest and penalties.

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

The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is simple.

The types do the math for you and offer standard guidance.  You can only do your federal return with all these kinds. 

  • Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer 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 income, and a few providers cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • 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 authorized 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 most taxpayers.  In fact, the IRS says it expected more than four in five 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 — particularly with so many data breaches.  But experts agree this is not an issue that should dissuade 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 direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”

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

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

    Bottom line

    For many 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 be certain to use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.