Warren Buffett 2014 Letter To Shareholders – 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 exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS cash because its employees don’t need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing really give you access to all of the forms you might need if you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing option for your needs.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced likelihood of mistakes: According to the IRS, there’s around a 1 percent 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.

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, filing 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 taxation 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 advantages — and the practice of doing this is simple.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can only do your federal return with these forms. 
    2. Utilize an online tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and some providers appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
    4. 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 record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

Using online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you may be worried about security — especially with so many data breaches.  But experts agree that this is not an issue which should deter you by e-filing.

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

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

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

Bottom line

For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain to use tax preparation software from a dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept protected.