Warren Buffett Korea – 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’re mostly on precisely the exact 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. 

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

But what about safety?  And can electronic filing really provide you access to all of the forms you might need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it may be the very best filing option for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of mistakes: 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 returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you can schedule electronic funds 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. Additionally you have the option to pay your balance by using the IRS Direct pay service from the checking account or savings account, filing 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 lead to interest and penalties.

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

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

How to e-file a tax return?

You have four choices 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 provide standard guidance.  You can only do your federal return with these kinds. 
    2. Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and a few providers cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of licensed providers, but be aware this option is likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is suitable, you could worry about safety — especially with all these data breaches.  But experts agree this is not a problem which should dissuade you from e-filing.

“E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

It’s important to use a trustworthy service to help you file your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not private.

Bottom line

For many taxpayers, it makes sense 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 effortless payment options.  Just make sure that you use tax preparation software from a dependable source, so you can ensure the information you supply to transmit to the IRS is going to be kept secure.