Berkshire Hathaway Letters To Shareholders 1965 2012 Warren Buffett – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on precisely the exact 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 because it’s a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS cash because its employees don’t need 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 accounts.

However, what about safety?  And can digital filing actually give you access to all of the forms you may need in case you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed 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’s easier to pay at your advantage 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 or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically means there’s an electronic copy of your tax documents.  So 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 practice of doing this is easy.

You have four choices for filing 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 have the ability to use the IRS Free File program.  The forms do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    2. Utilize an online 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 forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and some services cater to specific demographic groups.  For instance, 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 be aware this option is very likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you could worry about security — particularly with so many data breaches.  But experts agree this is not an issue that should deter you by e-filing.

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

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

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

Bottom line

For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure that you use tax preparation software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS will be kept secure.