What Is Warren Buffett Buying Now – Should I E-file My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on 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.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

When 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. And in return, you could get any refund you’re owed faster, particularly if you have it directly deposited to your bank account.

But what about safety?  And can electronic filing really give you access to all the forms you may need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and if it might be the very best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there’s approximately a 1% 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 returns compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it is easier to pay at your advantage 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.  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. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

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

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

The way to e-file a tax return?

You have four choices for filing 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 have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes 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 only do your federal return with all these kinds. 
    3. Utilize an online tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some software providers charge for their programs, Some are free.   The program asks you simple questions about your 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.  However, eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. 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 the majority of taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you could be worried about security — especially with all these data breaches.  But experts agree this is not an issue that should deter you by e-filing.

“E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information 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 information secure.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

It is important to use a trusted service to assist you record your taxes.  Chow advises to not e-file on a public computer or use an internet 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 submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain to use tax preparation software from a trusted source, so you can make certain the information which you provide to transmit to the IRS is going to be kept protected.