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

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

Americans and the IRS might not agree about everything, but they’re mostly 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. 

In return, you could find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.

However, what about security?  And can electronic filing really give you access to all the forms that you may need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.

If you’re thinking about e-filing, some 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 electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit 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 can also speed up the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  3. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Direct 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.  Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.

  4. Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax records.  So if something happens to your paperwork, you will have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is easy.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $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 provide basic guidance.  You can simply do your federal return with all these forms. 
    3. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups.  The IRS maintains a record of authorized 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 the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may be worried about security — particularly with so many data breaches.  But experts agree this is not an issue that should dissuade you by e-filing.

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

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

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

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax preparation software from a trusted source, so you may make certain the information you supply to transmit to the IRS will be kept secure.