Track Warren Buffett Investments – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re mostly on the 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 because it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. In return, you could find any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms are obtained: 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 that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may 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 process.

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

  4. Simple payment process: If you owe the IRS money, it’s easier to pay at your convenience 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 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. You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically means there’s an electronic copy of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

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

How to e-file a tax return?

You have four options for filing an electronically filed tax return to the IRS.

  • Free File Fillable Forms — If your income is over $72,000 and you are 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 basic advice.  You can only do your federal return with these forms. 
  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and financing to guide 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 help is typically limited based on earnings, and a few services appeal to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re 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 preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

    “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the email.”

    Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

    It’s important to employ a trusted service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection which is not confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make certain that you use tax preparation software from a dependable source, so you can make certain the information you provide to transmit to the IRS will be kept secure.