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

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

Americans and the IRS might not agree about everything, but they are 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’s a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. In return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank account.

However, what about security?  And can digital filing actually give you access to all of the forms that you may need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether 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 affirmation your forms have been obtained: The IRS will confirm 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 . 

    Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you can schedule electronic funds 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. You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically means there’s a digital backup 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 process of doing so is simple.

How to e-file a tax return?

    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. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can only do your federal return with all these kinds. 
    3. Use an online tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and some providers cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that 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 preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could be worried about safety — especially with all these data breaches.  But experts agree this isn’t an issue that should dissuade 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 data in the email.”

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

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

      Bottom line

      For many taxpayers, it makes sense 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 easy payment options.  Just make sure to use tax planning software from a dependable source, so you may ensure the information you supply to transmit to the IRS is going to be kept protected.