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

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

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

Nearly all individual income tax returns filed to the IRS are e-filed. 

In return, you could get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing actually give you access to all of the forms you may need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and whether it may be the best filing choice for your requirements.

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of errors: 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 information on issues discovered on e-filed returns compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from 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. Additionally you have the option 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.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

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

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

The way to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can simply do your federal return with these kinds. 
    3. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to steer you through the completion of your forms.  
    4. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you may be worried about safety — especially with so many data breaches.  But experts agree this isn’t a problem that should dissuade you from 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 direction, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

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

Bottom line

For many taxpayers, it makes sense to e-file a return since 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 be sure to use tax planning software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept secure.