Warren Buffett Lunch Auction – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re largely on precisely the 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 because it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could find any refund you’re owed faster, especially if you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing actually give you access to all of the forms that you may need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic 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 can 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 may also speed up the refund process.

  2. Reduced chance of errors: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when 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 send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking account 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 tax data: Submitting returns electronically means there’s a digital backup of your tax records.  If something happens to your paperwork, you’ll have an electronic backup.

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

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can only do your federal return with all these kinds. 
    2. Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to steer 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 yields.  However, eligibility for free help is normally restricted based on income, and a few services cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one. 

      Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you could worry about security — especially with so many data breaches.  But experts agree that this isn’t an issue which should dissuade you by e-filing.

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

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

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

      Bottom line

      For many taxpayers, it makes sense to e-file a yield 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 make certain that you use tax preparation software from a trusted source, so you may make certain the information you supply to transmit to the IRS is going to be kept protected.