All The Companies Warren Buffett Owns – 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 about everything, but they are largely on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing really give you access to all the forms that you might need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing option for your needs.

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

  1. Quick confirmation your forms have been obtained: 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 your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when 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 can schedule electronic funds 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, 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.

  4. Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax documents.  If something happens to your paperwork, then you will have an electronic backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $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 offer basic guidance.  You can only do your federal return with these kinds. 
    3. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. 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 some services cater to specific demographic groups.  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 most taxpayers.  In fact, the IRS says it expected over four tax returns to be filed through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you could be worried about safety — particularly with so many data breaches.  But experts agree that this isn’t an issue which should dissuade you from e-filing.

“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put security measures in place to keep your information secure.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted connections.”

It is important to use a trusted service that will assist you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not private.

Bottom line

For many 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 choices.  Just make sure to use tax planning 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.