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

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

Americans and the IRS may not agree on everything, but they’re largely 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. 

If you e-file your federal income tax return, you save the IRS cash because its employees do not need to spend time manually processing your return. In return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing actually give you access to all of the forms that you may need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    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’ll get your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

  2. Reduced chance of errors: In accordance with the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.

  3. Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings account, 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 penalties and interest.

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

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

    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.  The types do the math for you and offer basic advice.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your forms.  Some applications suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on income, and some providers appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

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

      Is e-filing really stable?

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

      “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than 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 information secure.  “Trainers normally use IRS particular APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

      It’s very important to employ a trusted service that will help you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection which is not confidential.

      Bottom line

      For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain to use tax planning software from a dependable source, so you can make certain the information which you supply to transmit to the IRS is going to be kept secure.