Follow Warren Buffett – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.

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

In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.

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

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

  1. Quick affirmation your forms have been received: 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 your forms have arrived safely. 

    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 can also speed up the refund procedure.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, 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 process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds 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. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, filing 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 is an electronic copy of your tax records.  If something happens to your paperwork, then you’ll have an electronic backup.

The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is easy.

The way to e-file a tax return?

You have four choices for submitting 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 could be able to use the IRS Free File program.  The forms do the math for you and offer basic advice.  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 options.  These options are an easy way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one. 

Using online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree that this isn’t a problem which should deter you by e-filing.

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

Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that require ab 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 public computer or utilize an internet connection that is not private.

Bottom line

For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain to use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS is going to be kept protected.