Warren Buffett Investment Philosophy – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on precisely 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. 

If you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank account.

But what about security?  And can electronic filing actually provide you access to all of the forms you might need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it may be the very best filing option for your needs.

If you’re Considering e-filing, some of the advantages include:

  1. Quick affirmation your forms are 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 three weeks or not.  Choosing direct deposit can also accelerate the refund process.

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

  4. Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as 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 the checking or savings account, 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 penalties and interest.

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

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is simple.

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

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice.  You can only do your federal return with these kinds. 
  • Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and a few services appeal to particular demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about security — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter you from e-filing.

    “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

    It is very important to employ a trustworthy service that will assist you record your taxes.  Chow advises to not e-file on a public computer or utilize an internet connection that isn’t confidential.

    Bottom line

    For most taxpayers, it is sensible to e-file a yield since it’s 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 that you use tax preparation software from a trusted source, so you can ensure the information which you provide to transmit to the IRS is going to be kept secure.