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

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

Americans and the IRS may not agree about everything, but they’re largely on 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. 

And in return, you can find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing actually give you access to all of the forms you might 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 whether it may be the very best filing option for your requirements.

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

  1. Quick confirmation 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. 
  2. Timely refunds: When you publish 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 may also speed up the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  And you can 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 using the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically means there is an electronic copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is easy.

How to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice.  You can only do your federal return with all these kinds. 
    3. Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some applications suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of authorized providers, but be aware this alternative is very 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 expected over four tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you may be worried about security — particularly with so many data breaches.  But experts agree that this isn’t a problem which should dissuade you by 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 direction, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the email.”

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

It’s important to employ a trusted service that will help you record your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which isn’t private.

Bottom line

For most taxpayers, it is sensible to e-file a yield because it is 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 preparation software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.