Warren Buffett March Madness – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS money because its employees don’t need to spend time manually processing your return. And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really provide you access to all the forms that you might need if you have a complex tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: 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 safely. 

    Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  3. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, 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, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

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

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

The forms do the math for you and provide basic advice.  You can simply do your federal return with these kinds. 

  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some applications providers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on income, and a few providers cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is likely to be the most costly one. 

    Using online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected over four tax returns to be filed through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has set security measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links .”

    It’s very important to employ 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 confidential.

    Bottom line

    For most taxpayers, it is sensible 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 effortless payment options.  Just be sure that you use tax preparation software from a trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.