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

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

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

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

If you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.

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

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit can also speed up the refund procedure.

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

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax records.  If something happens to your paperwork, then you will have an electronic backup.

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

The way to e-file a tax return?

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice.  You can only do your federal return with these kinds. 
  • Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and some services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could worry about safety — particularly with all these data breaches.  But experts agree this is not an issue that should deter you from e-filing.

    “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”

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

    It’s very important to employ a trusted service that will assist you file your taxes.  Chow advises not to e-file on a computer or use an online connection which isn’t private.

    Bottom line

    For many taxpayers, it is sensible to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure that you use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS will be kept secure.