Warren Buffett Magazine Cover – 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 on everything, but they’re largely on precisely the same page when it comes to e-filing individual income tax returns.

Nearly all 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 could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.

However, what about security?  And can digital filing really provide you access to all of the forms you might need if you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the very best filing choice for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced likelihood of errors: 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 info on problems discovered on e-filed yields compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic money transfers to easily 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 option to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically means there’s a digital copy of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is simple.

You have four choices 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 have the ability to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can only do your federal return with these kinds. 
    2. Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and a few providers cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a record of authorized providers, but be aware this alternative is likely to be the most costly one. 

Using online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, 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 — particularly with so many data breaches.  But experts agree this is not a problem that should deter you from e-filing.

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

Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set security measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

It is important to use a trusted service to help you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.

Bottom line

For most taxpayers, it is sensible to e-file a yield 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 be sure to 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.