Warren Buffett Stock Holdings 2020 – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on 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.  E-filing is popular because it’s a win-win for taxpayers and the IRS.

In return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing really give you access to all the forms you may need if you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    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 3 weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as 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. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can lead to penalties and interest.

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

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

How to e-file a tax return?

The types do the math for you and offer basic advice.  You can simply do your federal return with all these forms. 

  • Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and a few providers appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 
  • Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — particularly with so many data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

    “In actuality, 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 mail.”

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain that you use tax planning software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS will be kept protected.