Warren Buffett China – 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 largely on precisely the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

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. And in return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

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

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

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

    Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent 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 returns.

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax documents.  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 this is easy.

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice.  You can simply do your federal return with these forms. 
  • Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and a few services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one. 

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

    Is e-filing really stable?

    While e-filing is suitable, you may worry about safety — especially with so many data breaches.  But experts agree this is not an issue that should dissuade you from e-filing.

    “In fact, it can be more secure than paper filing since you’re sending your private 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 that the IRS has put security measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted connections”

    It is very important to employ a trusted service to help you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not private.

    Bottom line

    For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure to use tax preparation software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept protected.