How Many Shares Does Warren Buffett Own In Berkshire Hathaway – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they are largely 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 a favorite as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

But what about safety?  And can electronic filing actually provide you access to all of the forms that you might need in case you have a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice 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 was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced likelihood of errors: In accordance with the IRS, there is approximately 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 problems discovered on e-filed returns compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax documents.  So if something happens to your paperwork, you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.

You have four options 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 could have the ability to use the IRS Free File program.  The types do the math for you and provide basic guidance.  You can only do your federal return with these kinds. 
    2. Use an online tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 

Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you could worry about security — particularly with all these data breaches.  But experts agree this isn’t a problem which should dissuade you by e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, 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 information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted links “

It is 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 online connection that isn’t confidential.

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 easy payment options.  Just be sure to use tax preparation software from a trusted source, so that you may ensure the information you provide to transmit to the IRS is going to be kept protected.