Warren Buffett Retirement Strategy – What to Consider When Filing My Taxes Online

Is e-filing a better way to record your taxes? 

Americans and the IRS might not agree about 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 submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you can get any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.

However, what about security?  And can digital filing really provide you access to all the forms that you might need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it may be the 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 received: 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 months to be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1% 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.

  3. Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you can schedule electronic money transfers to 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 choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

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

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

  • Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance.  You can only do your federal return with all these kinds. 
  • Use an online tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on income, and some providers cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

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

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain to use tax preparation software from a dependable source, so you may ensure the information which you provide to transmit to the IRS will be kept secure.