Warren Buffett Predictions – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are mostly on the exact 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. 

When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you can find any refund you are owed quicker, particularly if you have it directly deposited to your bank account.

However, what about security?  And can digital filing actually give you access to all of the forms that you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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 has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    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 get your money in three weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there’s around 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 yields compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  You also have the choice 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 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 taxation information: Submitting returns electronically means there is an electronic copy of your tax documents.  If something happens to your paperwork, then you will have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and get those advantages — and the process of doing so 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 assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice.  You can only do your federal return with these forms. 
  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These options are an easy 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 life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and a few services appeal to specific 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 you should be aware this alternative is likely to be the most costly one. 
  • Using online tax preparation software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you may worry about security — particularly with all these data breaches.  But experts agree that this is not a problem which should deter you from e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the email.”

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

    It’s very important to employ a trusted service that will help you record your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which isn’t private.

    Bottom line

    For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure to use tax preparation software from a dependable source, so you can ensure the information you provide to transmit to the IRS will be kept protected.