Warren Buffett 5 25 – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the same page in regards 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 save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially if you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic 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 can 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 speed up the refund process.

  3. Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, 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 lead to penalties and interest.

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

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

You have four choices 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 may 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 assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with all these forms. 
    3. Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options 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 guide you through the completion of your forms.  
    4. Get complimentary, 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 income, and some providers appeal to particular demographic groups.  The IRS maintains a record of authorized 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 most taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you could be worried about safety — especially with so many data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All this is routed over TLS encrypted connections.”

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

Bottom line

For most taxpayers, it is sensible 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 effortless payment choices.  Just be certain that you use tax preparation software from a dependable source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.