Warren Buffett Portfolio – Should I E-file My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing actually give you access to all the forms that you might need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it might be the best filing option for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  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, then you’ll have an electronic backup.

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

The way to e-file a tax return?

You have four options for submitting 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 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 preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you will 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 particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one. 

      Using online tax prep software is far and away the preferred approach of most 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 could be worried about safety — especially 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 turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

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

      It’s important to use a trustworthy service to assist you record your taxes.  Chow advises not to e-file on a computer or use an online connection which isn’t private.

      Bottom line

      For many taxpayers, it makes sense 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 effortless payment choices.  Just make sure that you use tax planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS is going to be kept secure.