Warren Buffett Youtube Documentary – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely on precisely the 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 is a win-win for taxpayers and the IRS.

In return, you can find any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.

However, what about safety?  And can digital filing actually give you access to all the forms that you might need in case you have 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 may be the best filing option for your requirements.

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

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours 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 receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  3. Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, submitting 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) will lead to interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically implies there’s a digital copy 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 get those advantages — and the process of doing this is easy.

    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 Types — If your income is over $72,000 and you are comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can simply do your federal return with all these kinds. 
    3. Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and some services cater to particular demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one. 

      Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could worry about security — especially with so many data breaches.  But experts agree this is not an issue which should dissuade 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 direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

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

      It’s important to employ a trustworthy service that will assist you record your taxes.  Chow advises not to e-file on a computer or utilize an online connection which is not confidential.

      Bottom line

      For most 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 easy payment choices.  Just make sure to use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept protected.