Warren Buffett 10 Rules – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they are mostly on precisely 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 popular because it’s a win-win for taxpayers and the IRS.

In return, you could find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.

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

If you are thinking about 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 does not send any acknowledgment that your forms have arrived . 

    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 not.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced likelihood of errors: In accordance with the IRS, there’s 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 procedure: If you owe the IRS money, it is 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 option to pay your balance by using the IRS Direct pay service from the checking 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) can lead to penalties and interest.

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

The good news: Most taxpayers do decide to e-file and find those benefits — and the practice 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 could 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 any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance.  You can simply do your federal return with these kinds. 
    3. Utilize an online tax preparation tax or service software: 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 liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and some providers cater to particular demographic groups.  The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.

Is e-filing really stable?

While e-filing is convenient, you could worry about safety — particularly with so many data breaches.  But experts agree this is not a problem which should dissuade you from e-filing.

“In fact, it can 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 mail.”

Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

It’s very important to use a trustworthy service to help you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which isn’t private.

Bottom line

For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure to use tax planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS is going to be kept protected.