Warren Buffett Background – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on precisely the exact 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. 

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

However, what about security?  And can electronic filing actually give you access to all the forms you may need if you have a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing option 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 has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced chance of errors: According to the IRS, there’s approximately 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 yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.

The way to e-file a tax return?

The types do the math for you and offer standard guidance.  You can only do your federal return with all these kinds. 

  • Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish 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 finances to guide you through the completion of your forms.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, 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 licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should 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 the majority of taxpayers.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you may worry about security — especially with so many data breaches.  But experts agree that this isn’t a problem that should dissuade you from 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 information security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says.  “All this can be routed over TLS encrypted connections”

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return 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 make certain that you use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS will be kept secure.