Warren Buffett On Debt – 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.

In return, you can find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within one day of digital 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 receive your money in three weeks or not.  Choosing direct deposit can also speed up the refund process.

  3. Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1 percent error rate on e-filed yields, 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’s easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that 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, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, filing 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 penalties and interest.

  5. Digital storage of taxation information: Submitting returns electronically means there is an electronic backup of your tax records.  So if something happens to your paperwork, then you will 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 simple.

The way to e-file a tax return?

You have four choices for filing an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice.  You can simply do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax 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 liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and a few services appeal to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are 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. 

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

      Is e-filing really secure?

      While e-filing is convenient, you could worry about safety — particularly with all these data breaches.  But experts agree that this is not 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, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”

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

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.