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

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

Americans and the IRS might not agree on everything, but they’re mostly on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

And in return, you can find any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

But what about safety?  And can digital filing actually give you access to all of the forms that you might need in case you have a intricate 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 are thinking about e-filing, some of the advantages include:

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. 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 are going to get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced likelihood of mistakes: According to 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 problems discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  You can 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 easily 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 option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some software providers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and a few services appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option 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 expected over four in five tax returns to be submitted through tax return prep program.

      Is e-filing really secure?

      While e-filing is suitable, you may be worried about security — especially with all these data breaches.  But experts agree this isn’t an issue that should deter you from e-filing.

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

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

      It’s very important to use a trustworthy service to assist you file your taxes.  Chow advises to not e-file on a public computer or use an internet connection which is not confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make certain that you use tax planning software from a dependable source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.