Where Does Warren Buffett Keep His Money – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

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

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

But what about security?  And can electronic filing actually give 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 not e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

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

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, filing 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) can lead to penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, then you will have an electronic backup.

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

How to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can simply do your federal return with all these kinds. 
    2. 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 complete and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to steer you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, and some providers cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option 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.  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 suitable, you may be worried about safety — especially with all these data breaches.  But experts agree this is not a problem which should dissuade you by e-filing.

      “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”

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

      It’s important to use a trusted service to help you record your taxes.  Chow advises to not 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 since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure that you use tax preparation software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS will be kept secure.