Warren Buffett Teacher Book – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on precisely the exact 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. 

When you e-file your federal income tax return, you save the IRS money because its workers do not have to spend time manually processing your return. In return, you could get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.

However, what about security?  And can electronic filing really give you access to all of the forms that you may need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing option for your requirements.

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

  1. Quick affirmation your forms have been received: 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 your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that 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, as long as 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 the 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 following the filing due date (typically April 15) will lead to penalties and interest.

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

The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is simple.

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

  • Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and a few services appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of authorized providers, but you should 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.  Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you may be worried about safety — particularly with so many data breaches.  But experts agree that this isn’t a problem that should dissuade you from e-filing.

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

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file 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 dependable source, so you can ensure the information you provide to transmit to the IRS is going to be kept secure.