Warren Buffett Daily Life – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.

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

In return, you could find any refund you’re owed faster, particularly if you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing really provide you access to all the forms you might need in case you have a intricate 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 very best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: 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 receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced likelihood 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 information on issues discovered on e-filed yields compared with paper yields.

  4. Easy 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 afterwards if necessary, provided that you pay by the April 15 filing deadline.  And you’re able to schedule electronic money 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 making use of the IRS Direct pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically means there is a digital backup of your tax documents.  If something happens to your paperwork, then you will have a digital backup.

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

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

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice.  You can only do your federal return with these forms. 
  • Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some applications providers charge for their programs, Some are free.   The software asks you simple questions about your life and finances 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 some services appeal to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 
  • Using online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about security — especially with all these data breaches.  But experts agree that this is not an issue which should deter 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 actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make certain to use tax preparation software from a dependable source, so that you can ensure the information you provide to transmit to the IRS will be kept protected.