Warren Buffett Advice For Beginner Investors – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re mostly on 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.  E-filing is popular because it is a win-win for taxpayers and the IRS.

And in return, you could find any refund you’re owed faster, especially if you have it directly deposited to your bank account.

However, what about security?  And can digital filing actually give you access to all of the forms that you may need if you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us 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 received: The IRS will confirm 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 may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  4. Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience when 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.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is simple.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    3. Use an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your life and finances to steer 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 returns.  But eligibility for free aid is normally restricted based on income, and a few services cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you could worry about security — particularly with all these data breaches.  But experts agree this is not a problem that should deter you by e-filing.

“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 data in the email.”

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

It is very important to use a trustworthy service to assist you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection which isn’t confidential.

Bottom line

For many taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure that you use tax preparation software from a dependable source, so you may make certain the information you supply to transmit to the IRS is going to be kept protected.