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

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

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

Nearly all 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.

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

But what about security?  And can digital filing really provide you access to all of the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.

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

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

  3. Reduced chance of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  4. Simple payment procedure: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking 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 after the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically implies there’s a digital copy of your tax documents.  So if something happens to your paperwork, you will have a digital backup.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The forms do the math for you and provide basic advice.  You can simply do your federal return with these forms. 
    2. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and some services cater to specific demographic groups.  For instance, 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 alternative is likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

      Is e-filing really secure?

      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 dissuade you from e-filing.

      “In fact, it can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”

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

      It’s important to use a trustworthy service to assist you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax planning software from a dependable source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.