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

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

Americans and the IRS might not agree on everything, but they are largely 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.

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

However, what about security?  And can electronic filing actually give you access to all the forms that you might need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and if it might be the very best filing option for your requirements.

If you’re Considering 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 one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    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 are going to receive your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to 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 choice to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically implies there is an electronic backup of your tax documents.  If something happens to your paperwork, then you’ll have a digital backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can only do your federal return with these forms. 
    2. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some providers cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

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

Is e-filing really stable?

While e-filing is convenient, you could be worried about safety — especially with all these data breaches.  But experts agree this is not an issue which should dissuade you from e-filing.

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

Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted connections”

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

Bottom line

For most 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 choices.  Just be sure that you use tax preparation software from a dependable source, so you can make certain the information you provide to transmit to the IRS will be kept protected.