Warren Buffett Buys Prudential – 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 about everything, but they are largely on the 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. 

When you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing actually give you access to all the forms you might need if you have a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive 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 chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, 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 easier to pay at your advantage if 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 using the IRS Direct pay service from your checking or savings account, submitting 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) can result in penalties and interest.

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

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and offer standard guidance.  You can only do your federal return with all these kinds. 
    2. Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some services cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one. 

      Using online tax preparation software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.

      Is e-filing really stable?

      While e-filing is suitable, you could worry about security — particularly with all these data breaches.  But experts agree that this isn’t an issue which should deter you from e-filing.

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

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

      It’s very important to use a trusted service that will help you record your taxes.  Chow advises to not e-file on a computer or use an internet connection that is not confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax planning software from a dependable source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.