Warren Buffett Jr – 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.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

And in return, you can get any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing really provide you access to all the forms that you might need in case you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of mistakes: According to 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 problems discovered on e-filed returns compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

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

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

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and provide basic guidance.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and some providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 

      Using online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is suitable, you may be worried about safety — particularly with so many data breaches.  But experts agree that this is not a problem which should deter you from e-filing.

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

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

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

      Bottom line

      For most taxpayers, it makes sense 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 easy payment options.  Just make certain that you use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS will be kept protected.