Warren Buffett Letter 2020 – Should I E-file My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re 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. 

In return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.

But what about security?  And can digital filing really provide you access to all the forms you may need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it might be the best filing option for your requirements.

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

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital 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 may take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1 percent 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.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.

  5. Digital storage of taxation information: Submitting returns electronically implies there is a digital copy of your tax documents.  So 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.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and offer basic advice.  You can simply do your federal return with these forms. 
    2. Utilize an online tax preparation service or tax software: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some services cater to specific demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 

Using online tax preparation software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

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

“In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”

Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data safe.  “Trainers normally use IRS particular 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 that will assist you record your taxes.  Chow advises to not e-file on a public computer or use an online connection which isn’t private.

Bottom line

For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure that you use tax planning software from a dependable source, so that you can make certain the information which you supply to transmit to the IRS is going to be kept secure.