Warren Buffett 90 10 – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.

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

In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.

But what about safety?  And can digital filing actually give you access to all the forms you might need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

  2. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax documents.  So if something happens to your paperwork, you’ll have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.

How to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can simply do your federal return with all these kinds. 
    2. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some applications providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized 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 favored approach of most taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you may worry about safety — especially with all these data breaches.  But experts agree this isn’t a problem which 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 sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the email.”

Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

It is important to use a trustworthy service to help you file your taxes.  Chow advises to not e-file on a public computer or use an online connection that is not private.

Bottom line

For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure to use tax planning software from a dependable source, so you may make certain the information which you provide to transmit to the IRS will be kept protected.