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

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the exact same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed. 

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

However, what about security?  And can digital filing actually give you access to all the forms that 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 advantages of e-filing, and if it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 

    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 receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced chance of mistakes: According to the IRS, there is around a 1% 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 yields.

  3. Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic backup of your tax records.  If something happens to your paperwork, then you’ll have an electronic backup.

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

The way to e-file a tax return?

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

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice.  You can simply do your federal return with all these kinds. 
  • Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your own life and finances to steer you through the completion of your forms.  
  • 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 normally restricted based on income, and a few services cater to specific demographic groups.  The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

    Using 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 program.

    Is e-filing really stable?

    While e-filing is suitable, you could worry about security — particularly with so many data breaches.  But experts agree this is not a problem which should dissuade you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the email.”

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

    It is very important to employ a trustworthy service that will assist you file your taxes.  Chow advises not to e-file on a computer or use an online connection that is not private.

    Bottom line

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