Warren Buffett Investments List – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely 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 workers do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can electronic filing actually provide you access to all the forms you may need if 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 may be the very best filing option for your requirements.

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of digital 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 may take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  4. Easy payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your 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) can lead to interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, you will have a digital backup.

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

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can simply do your federal return with these kinds. 
  • Utilize an online tax preparation service or tax software: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and a few providers appeal to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 
  • Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

    Is e-filing really secure?

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

    “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”

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

    It is very important to employ a trusted service that will assist you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax planning software from a trusted source, so that you can make certain the information you provide to transmit to the IRS is going to be kept secure.