Warren Buffett Next Big Thing – What to Consider When Filing My Taxes Online

Is e-filing a better way to file your taxes? 

Americans and the IRS may not agree about everything, but they are largely on the same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly if 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 that you may need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

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

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing again, as long as 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 accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.

  4. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic copy of your tax records.  If something happens to your paperwork, you will have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and get those benefits — and the process of doing so is easy.

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

  • Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can simply do your federal return with all these forms. 
  • Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some applications suppliers 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 types.  
  • Get complimentary, 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 services appeal to particular demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be submitted through tax return prep program.

    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 is not a problem which should dissuade you by e-filing.

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

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a yield because it is 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 preparation software from a dependable source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.