When Does Warren Buffett Buy Stocks – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

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

However, what about safety?  And can digital filing really provide you access to all the forms that you might need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Easy payment procedure: If you owe the IRS money, it is easier 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 from the April 15 filing deadline.  And you can schedule electronic money 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. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax records.  If something happens to your paperwork, then you’ll have an electronic backup.

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

How 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 not as you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without 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 these kinds. 
    3. Use an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your forms.  Some applications suppliers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer 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 returns.  But eligibility for free help is typically limited based on income, and a few services appeal to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is very likely to be the most costly one. 

      Employing online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected over four tax returns to be submitted through tax return prep program.

      Is e-filing really secure?

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

      “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

      It is very important to use a trustworthy service to assist you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which is not private.

      Bottom line

      For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain to use tax planning software from a trusted source, so that you can ensure the information which you supply to transmit to the IRS will be kept secure.