Warren Buffett 2019 Investments – 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 the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed 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. And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.

But what about security?  And can electronic filing really give you access to all the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that 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 choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, 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) will result in interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records.  If something happens to your paperwork, you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is easy.

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

  • Free File Fillable Forms — If your income is more than $72,000 and you are 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 provide standard guidance.  You can only do your federal return with all these forms. 
  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
  • 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 some services appeal to particular demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 
  • Using online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree that this isn’t an issue that should dissuade you by e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”

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

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

    Bottom line

    For many taxpayers, it makes sense 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 easy payment choices.  Just make certain to use tax planning software from a dependable source, so you can ensure the information which you supply to transmit to the IRS will be kept secure.