Warren Buffett 2016 – What to Consider When Filing My Taxes Online

Is e-filing really a better way to file 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.

The majority of individual income tax returns filed to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing actually provide you access to all the forms that you might need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced chance of mistakes: In accordance with the IRS, there is around 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 yields.

  4. Simple payment procedure: If you owe the IRS money, it is simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you can 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking 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) will lead to penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is easy.

How to e-file a tax return?

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

    1. Utilize 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 Forms — If your income is over $72,000 and you are comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can only do your federal return with all these kinds. 
    3. Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
    4. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few providers cater to specific 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 you should be aware this option is likely to be the most costly one. 

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

      Is e-filing really stable?

      While e-filing is suitable, you may worry about safety — particularly with so many data breaches.  But experts agree this isn’t an issue which should deter you from e-filing.

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

      Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has set safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

      It’s important to employ a trustworthy service that will help you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection that isn’t private.

      Bottom line

      For many taxpayers, it is sensible 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 easy payment options.  Just make certain to use tax planning software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS will be kept secure.