Warren Buffett Long Term Investing – 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 are mostly on precisely the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed 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 could get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.

However, what about safety?  And can electronic filing actually provide you access to all of the forms that you may 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 might be the very best filing option for your needs.

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 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    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 get your money in three weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage when 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.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

The way to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.  The types do the math for you and offer basic 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 alternatives.  These options are an easy way to complete and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on earnings, and some providers cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could be worried about safety — especially with all these data breaches.  But experts agree this is not a problem that should dissuade 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, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

      Dennis Chow, vice president of data security at SCIS Security, explains the IRS has put safety measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return since 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 sure that you use tax planning software from a trusted source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.