Warren Buffett Stock Advice – What to Consider When Filing My Taxes Online

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

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

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

And in return, you could get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing really give you access to all the forms that you might need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages 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 electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically implies there is an electronic copy of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

You have four options for filing 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 have the ability to use the IRS Free File program.  The types do the math for you and offer basic advice.  You can only do your federal return with these kinds. 
    2. Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and some providers appeal to particular demographic groups.  The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter you by e-filing.

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

Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has set security measures in place to keep your information secure.  “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 trusted service that will help you record your taxes.  Chow advises to not e-file on a public computer or utilize an internet connection which isn’t confidential.

Bottom line

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