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

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

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

When you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. And in return, you could find any refund you’re owed faster, especially if you have it directly deposited into your bank account.

However, what about security?  And can digital filing really give you access to all the forms you might need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your needs.

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 electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  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’ll receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there’s 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 issues discovered on e-filed returns compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic money transfers to easily 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 Direct 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. 

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

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

The way to e-file a tax return?

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance.  You can only do your federal return with these forms. 
  • Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on earnings, and some services appeal to specific demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 
  • Using online tax preparation software is far and away the favored approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about security — particularly with all these data breaches.  But experts agree this is not a problem which 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 system rather than exposing your data in the email.”

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

    It is very important to use a trustworthy service to 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 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 effortless payment options.  Just make certain that you use tax planning software from a dependable source, so that you can ensure the information which you supply to transmit to the IRS will be kept secure.