Warren Buffett Parents – 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 largely on precisely the 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 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 do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly if you have it directly deposited into your bank account.

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

If you are 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 one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can 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 accelerate the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that 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, provided that 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 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 backup of your tax records.  So if something happens to your paperwork, you’ll have an electronic backup.

The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is simple.

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 not as you may be able to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 
    2. Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options.  These options are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and some providers cater to particular demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 

Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four in five tax returns to be filed 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 this is not an issue which should dissuade you by e-filing.

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

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

Bottom line

For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS will be kept secure.