Warren Buffett Podcast Interview – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on precisely 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. 

When you e-file your federal income tax return, you save the IRS money because its employees don’t have to spend time manually processing your return. And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited into your bank account.

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

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced chance 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 information on issues discovered on e-filed returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic money 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 your checking or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

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

The forms do the math for you and offer standard guidance.  You can only do your federal return with all these forms. 

  • Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are a simple way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are free.   The software asks you simple questions about your 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 returns.  But eligibility for free help is normally restricted based on earnings, and some services appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

    Using online tax prep software is far and away the preferred 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 convenient, you could worry about safety — particularly with so many data breaches.  But experts agree that this isn’t an issue which should deter you by e-filing.

    “In fact, 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 email.”

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

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

    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 make sure that you use tax preparation software from a trusted source, so you may make certain the information which you provide to transmit to the IRS is going to be kept protected.