Vanguard S&P 500 Etf Warren Buffett – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on precisely the exact 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. 

And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

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

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish 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 three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced likelihood of errors: According to the IRS, there is around 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 process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Immediate pay service from the checking account 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 after the filing due date (typically April 15) can result in interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically means there’s an electronic backup of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications providers 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 types.  
    4. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and some services cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is 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 more than four tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you could worry about safety — particularly with all these data breaches.  But experts agree this is not a problem which should deter you by e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

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

It’s important to use a trusted service that will assist you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that isn’t private.

Bottom line

For many 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 choices.  Just be sure to use tax planning software from a trusted source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.