Warren Buffett Instagram – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely on precisely the 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 a favorite as it’s a win-win for taxpayers and the IRS.

In return, you could get any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.

But what about security?  And can digital filing really give you access to all of the forms that you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is easier 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.  And you can schedule electronic funds 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. Additionally you have the choice to pay your balance by making use of 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. 

  5. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic backup of your tax documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

You have four choices for filing an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can only do your federal return with these forms. 
    2. Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on earnings, and some services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 

      Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than 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 worry about safety — particularly with so many data breaches.  But experts agree this isn’t a problem that should dissuade you by e-filing.

      “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

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

      It’s important to employ a trusted service to help you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection which isn’t confidential.

      Bottom line

      For many taxpayers, it is sensible to e-file a return because 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 make certain that you use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept protected.