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

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

Americans and the IRS might not agree about everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. In return, you could get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can electronic filing really provide you access to all the forms that you might need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s 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, some of the advantages include:

  1. Quick affirmation 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 that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

  3. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically implies there’s an electronic backup of your tax documents.  If something happens to your paperwork, then you will 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 simple.

How to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can simply do your federal return with these kinds. 
    2. 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 providers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and some services cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but 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 the majority of taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.

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 is not 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,” says Scott Grissom, vice president of product leadership, marketing and sales 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 mail.”

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

It’s important to employ a trustworthy service that will 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 many taxpayers, it is sensible to e-file a yield because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain to use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.