Warren Buffett Shareholder Letter 2020 – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

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. And in return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing actually provide you access to all of the forms you might need if 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 whether it may be the best filing option 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 confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can 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 errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

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

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

The fantastic 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?

The forms do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 

  • Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and a few services cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a record of authorized providers, but be aware this alternative is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most taxpayers.  Actually, 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 convenient, you could be worried about security — particularly with so many data breaches.  But experts agree this isn’t an issue which should dissuade you from e-filing.

    “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

    It’s very important to use a trustworthy service that will assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.

    Bottom line

    For many taxpayers, it is sensible to e-file a return 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 be certain that you use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS will be kept secure.