Warren Buffett Accounting Book – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are largely on the exact same page in regards to e-filing individual income tax returns.

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

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

However, what about safety?  And can digital filing really give you access to all the forms you may need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: 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 that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  And you’re able to 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 Immediate pay service from the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.

  4. Digital storage of taxation information: Submitting returns electronically implies there is an electronic backup of your tax documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and provide basic advice.  You can simply do your federal return with these forms. 
    2. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to complete and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and a few services appeal to particular demographic groups.  By way of 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 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.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is suitable, you may worry about security — particularly with so many data breaches.  But experts agree that this isn’t a problem that should deter you by e-filing.

      “In fact, it can 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 data security at SCIS Security, explains that the IRS has set safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

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

      Bottom line

      For most taxpayers, it is sensible 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 effortless payment choices.  Just make certain that you 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 secure.