Warren Buffett Index Fund Bet – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on 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. 

If 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 could find any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.

However, what about safety?  And can electronic filing actually provide you access to all of the forms that you might need in case you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it might be the very best filing option for your requirements.

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can 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 can also speed up the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking or savings accounts, filing 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) will result in interest and penalties.

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

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

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

The forms do the math for you and offer basic advice.  You can simply do your federal return with these kinds. 

  • Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to finish and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services cater to particular demographic groups.  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 prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about security — particularly with so many data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

    “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the email.”

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure to use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS will be kept secure.