Warren Buffett Financial Tips – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on precisely 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 a favorite because it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its workers don’t have to spend time manually processing your return. And in return, you could get any refund you are owed faster, especially if you have it directly deposited to your bank account.

However, what about safety?  And can digital filing actually give you access to all the forms you may need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice for your needs.

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

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

  3. Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info 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 if you e-file.  You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Direct 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.  Just be aware delaying payment following the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records.  If something happens to your paperwork, you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing so is simple.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can only do your federal return with all these kinds. 
    3. Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple 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 own life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and a few providers appeal to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re 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 preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep program.

      Is e-filing really secure?

      While e-filing is convenient, you may worry about safety — especially with so many data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

      Dennis Chow, vice president of information 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 token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

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

      Bottom line

      For most taxpayers, it is sensible 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 easy payment choices.  Just be sure to use tax planning 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.