Warren Buffett Stock Holdings – Should I E-file My Taxes Online

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

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

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

In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.

But 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 ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the very best filing option for your needs.

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

  1. Quick affirmation 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 does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

  3. Reduced likelihood of errors: According to the IRS, there’s 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 issues discovered on e-filed yields compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic money transfers to 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 your checking or savings accounts, 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 lead to interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there is an electronic copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.

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 may be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on earnings, and some services cater to specific demographic groups.  By way of example, 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 alternative is 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 in five tax returns to be filed through tax return prep software.

      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 isn’t a problem that should deter you by e-filing.

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

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

      It’s very important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection which is not confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax preparation software from a dependable source, so that you can ensure the information you provide to transmit to the IRS will be kept secure.