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

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the same page in regards 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.

When you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can get any refund you are owed faster, particularly if you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors 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’s simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking or savings accounts, submitting 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 lead to interest and penalties.

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

The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.

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

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic guidance.  You can simply do your federal return with all these forms. 
  • Utilize an online tax preparation service or tax applications: 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 software asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and some services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping 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. 
  • Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you could be worried about safety — particularly with so many data breaches.  But experts agree this isn’t an issue which should dissuade you from e-filing.

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

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return since 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 make sure that you use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS is going to be kept secure.