Warren Buffett Selling Stocks – Should I E-file 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’re largely on the exact 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. 

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 can find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.

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

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

  1. Quick confirmation your forms are received: The IRS will confirm 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 . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from your 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 information: Submitting returns electronically implies there’s a digital copy of your tax documents.  So 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 benefits — and the practice of doing so is simple.

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

The forms do the math for you and provide standard guidance.  You can only do your federal return with these kinds. 

  • Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few services appeal to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one. 
  • Employing online tax preparation software is far and away the favored 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 stable?

    While e-filing is convenient, you may worry about safety — particularly with all these data breaches.  But experts agree this is not a problem that should deter you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain to use tax preparation software from a dependable source, so that you may ensure the information which you provide to transmit to the IRS will be kept protected.