How Much Money Did Warren Buffett Start With – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they are largely 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.  E-filing is popular because it’s a win-win for taxpayers and the IRS.

And in return, you could find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing actually give you access to all the forms that you might need in case you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm 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 submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  4. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when 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 can schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, as long as 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 account or savings account, submitting 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) will result in interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic backup of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

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

You have four options 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. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can only do your federal return with these forms. 
    3. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These choices are a simple 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 steer you through the completion of your forms.  
    4. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some services cater to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

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

      Is e-filing really secure?

      While e-filing is suitable, you could be worried about security — especially with so many data breaches.  But experts agree this isn’t an issue which should dissuade you by e-filing.

      “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”

      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.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All this can be routed over TLS encrypted links “

      It is important to use a trusted service that will assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet 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 submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be sure to use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.