Warren Buffett Canadian Investments – What to Consider When Filing My Taxes Online

Is e-filing a much better way to record 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.  E-filing is popular because it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. In return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing actually provide you access to all the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced chance of errors: According to the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience when you e-file.  You can submit returns early and pay later if needed, as long as 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. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is simple.

    1. Utilize 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 standard advice.  You can simply do your federal return with these kinds. 
    2. Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get complimentary, 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 earnings, and some providers appeal to specific demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this alternative 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 expected over four in five tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is suitable, you may be worried about safety — especially with all these data breaches.  But experts agree this isn’t a problem which should deter you by e-filing.

“In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the email.”

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

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

Bottom line

For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax preparation software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept protected.