Warren Buffett It Takes 20 Years – 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’re largely on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is popular as it is a win-win for taxpayers and the IRS.

And in return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.

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

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get 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 around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes 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 is easier to pay at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to 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 choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, 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 information: Submitting returns electronically means there’s an electronic copy of your tax records.  So if something happens to your paperwork, you’ll have a digital backup.

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

You have four options for filing 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.  The types do the math for you and offer standard advice.  You can simply do your federal return with all these kinds. 
    2. Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

      Employing online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

      Is e-filing really stable?

      While e-filing is suitable, you may worry about security — especially with so many data breaches.  But experts agree that this is not a problem which should deter you by e-filing.

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

      Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data secure.  “Vendors typically utilize 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 trustworthy service that will assist you record your taxes.  Chow advises not to e-file on a computer or use an internet connection which isn’t confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain to use tax preparation software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept secure.