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

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

Americans and the IRS might not agree on everything, but they are largely on the same page in regards 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 save the IRS cash because its workers do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank accounts.

But what about security?  And can digital filing really provide you access to all of the forms that you may need if you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of electronic 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 can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  3. Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds 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 Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.

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

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this is simple.

The way to e-file a tax return?

  • Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance.  You can simply do your federal return with all these kinds. 
  • Utilize an online tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you could be worried about safety — especially with so many data breaches.  But experts agree this is not an issue which should dissuade 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 direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”

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

    It is important to employ a trustworthy service that will assist you record your taxes.  Chow advises not to e-file on a computer or use an internet connection which is not confidential.

    Bottom line

    For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax preparation software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS is going to be kept protected.