Warren Buffett On Leverage – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re mostly on precisely 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. 

And in return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank account.

However, what about security?  And can electronic filing actually give you access to all the forms you might need in case you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the best filing option for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm 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 publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit may also speed up the refund process.

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

  4. Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  And you can schedule electronic money 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 choice to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax documents.  If something happens to your paperwork, then you will have an electronic backup.

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

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

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

  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to guide 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 returns.  However, eligibility for free aid is normally restricted based on earnings, and a few providers appeal to particular demographic groups.  The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you from e-filing.

    “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

    Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

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

    Bottom line

    For most taxpayers, it is sensible to e-file a yield 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 be sure that you use tax planning software from a dependable source, so you can ensure the information which you provide to transmit to the IRS will be kept secure.