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

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

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

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of errors: According to the IRS, there is 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 problems discovered on e-filed yields compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax records.  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 so is easy.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can simply do your federal return with all these forms. 
    2. Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your forms.  Some software providers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. 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 income, and a few providers cater to specific demographic groups.  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 preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you could worry about security — especially with so many data breaches.  But experts agree that this is not an issue which should deter you by e-filing.

      “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, 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 email.”

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

      It’s very important to use a trustworthy service that will help you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection that isn’t private.

      Bottom line

      For many 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 effortless payment options.  Just make certain that you use tax preparation software from a dependable source, so you can make certain the information which you supply to transmit to the IRS is going to be kept secure.