Warren Buffett Invest In What You Know Quote – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the exact same page in regards 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.

If you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you could find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.

However, what about security?  And can digital filing actually give you access to all of the forms you may need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your needs.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given 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.

  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% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later 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, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax records.  If something happens to your paperwork, then you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.

You have four options for submitting an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
    4. Get free, in-person tax help: 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 providers appeal to specific demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 

      Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is suitable, you may worry about security — particularly with so many data breaches.  But experts agree that this isn’t a problem which should deter you from e-filing.

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

      Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need token 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 that is not confidential.

      Bottom line

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