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

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

Americans and the IRS might not agree about everything, but they’re largely on precisely the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed. 

In return, you could find any refund you are owed quicker, especially if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really give you access to all the forms you might 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 if it may be the best filing choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes 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 convenience if you e-file.  You can 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, 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 the checking 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 interest and penalties.

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

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

How to e-file a tax return?

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

  • Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance.  You can simply do your federal return with all these forms. 
  • Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and some services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a record of authorized 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 program.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree that this isn’t an issue that should deter you from e-filing.

    “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

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

    It’s important to use a trusted service to help you record your taxes.  Chow advises not to e-file on a public computer or use an online connection that is not confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a return since 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 to use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.