Warren Buffett Investing Advice 2016 – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on the exact same page when it comes to e-filing individual income tax returns.

Nearly all 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.

When you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.

But what about security?  And can digital filing actually give you access to all of the forms that you may need in case you have 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 may be the 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 confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.

  3. Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program.  The forms do the math for you and offer basic advice.  You can only do your federal return with these forms. 
    2. Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some providers cater to particular demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this option 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.  Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you could worry about safety — particularly with so many data breaches.  But experts agree this is not a problem which should deter you from 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, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

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

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

Bottom line

For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax preparation software from a dependable source, so you may ensure the information which you provide to transmit to the IRS will be kept secure.