Warren Buffett Interview – Should I E-file My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re mostly on 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 popular as it’s a win-win for taxpayers and the IRS.

And in return, you can find any refund you are owed quicker, especially if you have it directly deposited to your bank account.

But what about safety?  And can digital filing actually provide you access to all of the forms you might need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  4. Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file.  You can submit returns early and pay afterwards 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking 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 data: Submitting returns electronically implies there is an electronic copy of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

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

  • Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can simply do your federal return with all these forms. 
  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These choices are an easy 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 finances to guide you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and some services cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated 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 be worried about security — especially with all these data breaches.  But experts agree that this isn’t a problem that should dissuade you by 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 sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

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

    Bottom line

    For most 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 sure that you use tax preparation software from a trusted source, so you can make certain the information you supply to transmit to the IRS is going to be kept secure.