Warren Buffett Investment Strategy For Beginners – 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 on everything, but they are largely on precisely the exact same page in regards 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 as it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. In return, you can get any refund you are owed faster, especially if you have it directly deposited into your bank account.

But what about safety?  And can digital filing actually provide you access to all of the forms that you might need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

If you are 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 one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    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 accelerate the refund process.

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

  3. Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  And you can 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 choice to pay your balance by making use of 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. 

  4. Digital storage of tax information: Submitting returns electronically implies there is an electronic backup 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 find those advantages — and the practice of doing so is easy.

How to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.  The forms do the math for you and offer standard guidance.  You can simply do your federal return with these kinds. 
    2. Utilize an online tax preparation service or tax software: Tax prep 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 programs, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one. 

Employing online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you may worry about safety — especially with all these data breaches.  But experts agree that this isn’t an issue that should dissuade 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 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 system rather than exposing your data in the mail.”

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 particular APIs that need token sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

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

Bottom line

For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure that you use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS is going to be kept secure.