Warren Buffett Net Worth Over Time – 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 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 popular as it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

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

If you are thinking about 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 doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  3. 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 afterwards if needed, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing 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) can result in interest and penalties.

  4. Digital storage of taxation information: Submitting returns electronically means there is 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 decide to e-file and find those advantages — and the process of doing so is simple.

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

    1. Utilize 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 offer basic advice.  You can only do your federal return with all these forms. 
    2. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and financing to guide 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 returns.  But eligibility for free help is normally restricted based on income, and some providers cater to specific demographic groups.  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 preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you may be worried about safety — particularly with so many data breaches.  But experts agree this is not a problem which should deter you from e-filing.

“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

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

It is very important to employ a trusted service that will help you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which is not private.

Bottom line

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