Podcast Warren Buffett – 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 on everything, but they are largely on precisely the same page when it comes to e-filing individual income tax returns.

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

If you e-file your federal income tax return, you conserve the IRS money because its employees don’t need to spend time manually processing your return. In return, you could find any refund you are owed faster, particularly if you have it directly deposited to your bank account.

But 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 ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced chance of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  And you can schedule electronic money 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 Direct pay service from your checking 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 taxation data: Submitting returns electronically means there’s a digital backup of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

The forms do the math for you and provide standard advice.  You can simply do your federal return with these forms. 

  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some applications providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on income, and some providers appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this alternative is very 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 anticipated more than four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could worry about safety — especially with so many data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

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

    Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your data safe.  “Trainers normally use IRS particular APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections.”

    It is important to employ a trusted service to help you file your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain that you use tax planning software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept secure.