Warren Buffett Current Portfolio – 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 on everything, but they’re mostly on precisely 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. 

If 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 faster, especially if you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing actually give you access to all of the forms you might need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing option for your needs.

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

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced chance of errors: According to the IRS, there’s approximately 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 problems discovered on e-filed yields compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  You can 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 option to pay your balance by using the IRS Immediate pay service from the checking 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 taxation data: Submitting returns electronically means there is an electronic backup of your tax documents.  So if something happens to your paperwork, then you will have an electronic backup.

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

The types do the math for you and offer standard guidance.  You can only do your federal return with these kinds. 

  • Use an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and a few services cater to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but 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 more than four in five tax returns to be filed through tax return prep software.

    Is e-filing really stable?

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

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

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

    It’s very important to use a trustworthy service that will help you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which is not confidential.

    Bottom line

    For many taxpayers, it is sensible to e-file a yield 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 that you use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept protected.