Warren Buffett’s Favorite Investing Book – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS cash 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 in the event that you have it directly deposited into your bank account.

But what about security?  And can digital filing actually give you access to all of the forms that you may need in case you have a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of digital 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 be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate 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 penalties and interest.

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

The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.

How to e-file a tax return?

You have four options for submitting an electronically filed tax return to the IRS.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
    2. Use an online tax preparation tax or service software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and a few services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a database of authorized 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 favored approach of the majority of taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you may be worried about security — especially with all these data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

“In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

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

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

Bottom line

For many taxpayers, it is sensible to e-file a return 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 be sure to use tax planning software from a dependable source, so you can make certain the information you provide to transmit to the IRS is going to be kept protected.