Warren Buffett Report – 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’re largely 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. 

When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. In return, you can get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

But what about security?  And can digital filing really give you access to all of the forms you might need in case you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your needs.

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

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

    Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced chance of errors: 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 information on problems discovered on e-filed returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

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

The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is simple.

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

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without any assistance, 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 service or tax software: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software 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 types.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on income, and a few services appeal to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is convenient, you may be worried about safety — particularly with all these data breaches.  But experts agree that this is not an issue 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 direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety 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 links .”

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

    Bottom line

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