Warren Buffett Annual Shareholder Letter 2017 – 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 are mostly on precisely the same page when it comes to e-filing individual income tax returns.

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

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you could get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.

However, what about security?  And can electronic filing actually provide you access to all of 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 whether it might be the very best filing option for your needs.

If you are thinking about 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 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 process.

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

  3. Simple payment process: 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 afterwards if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can simply do your federal return with all these forms. 
  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and a few services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about safety — especially with so many data breaches.  But experts agree this isn’t a problem which should deter you by e-filing.

    “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”

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

    It’s very important to employ a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection which isn’t private.

    Bottom line

    For most taxpayers, it is sensible to e-file a yield because it’s 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 that you use tax planning software from a dependable source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.