Warren Buffett Letter To Shareholders 2012 – 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 mostly on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

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

However, what about safety?  And can electronic filing really provide you access to all the forms you may need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it might be the very best filing option for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was 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 submit 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 less.  Choosing direct deposit may also speed up the refund process.

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

  4. Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and get those advantages — and the process of doing this is simple.

How to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re 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 advice.  You can only do your federal return with all these forms. 
    3. Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and some providers cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re 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. 

Employing online tax prep software is far and away the preferred 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 be worried about safety — especially with all these data breaches.  But experts agree this isn’t a problem that should deter you by 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 fact, it may be more secure than paper filing as you’re sending your private 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 safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

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

Bottom line

For many taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain that you use tax planning software from a trusted source, so that you may make certain the information you supply to transmit to the IRS will be kept secure.