How To Invest Like Warren Buffett – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

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

But what about safety?  And can electronic filing actually provide you access to all of the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it might be the best filing option for your needs.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of digital 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 may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s 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.  You also have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, 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 penalties and interest.

  4. Digital storage of taxation information: Submitting returns electronically implies there is an electronic backup of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is simple.

The way to e-file a tax return?

The types do the math for you and offer standard guidance.  You can simply do your federal return with all these kinds. 

  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on income, and some services cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • 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 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it expected over four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about security — especially with all these data breaches.  But experts agree this is not a problem that should deter 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 direction, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, explains 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 connections.”

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

    Bottom line

    For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax preparation software from a dependable source, so that you may make certain the information you supply to transmit to the IRS will be kept protected.