Warren Buffett Assets – 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 on everything, but they’re largely on precisely the exact 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.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS money because its employees don’t need to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited into your bank accounts.

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

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital 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 weeks to be given a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there is approximately 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 yields compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

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

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

How to e-file a tax return?

You have four options for filing an electronically filed tax return to the IRS.

The types do the math for you and provide basic advice.  You can only do your federal return with all these kinds. 

  • Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one. 

    Employing 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 secure?

    While e-filing is convenient, you may be worried about safety — particularly with all these data breaches.  But experts agree that this isn’t a problem 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 direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”

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

    It is very important to employ a trusted service that will assist you file your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not private.

    Bottom line

    For most taxpayers, it makes sense 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 effortless payment options.  Just be sure to use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS is going to be kept protected.